“We look for the BoC to lift the overnight rate by 75bps at its September meeting, and again by 25bps in October,” writes Andrew Kelvin, Chief Canada Strategist at TD Securities (TDS).

Additional Quotes:

“The combination of very strong inflation and extremely tight labour market metrics both support aggressive tightening from the BoC. A 75bp move would also be consistent with the Governor's prepared remarks from the MPR press conference, in which he argued that rates should move quickly to the top-end, or slightly above, the neutral range.”

“We look for a terminal rate of 3.50% this cycle, with rate cuts starting in 2022Q3. However, we caution that the balance of risks around the terminal rate skews decisively towards a higher end point for the BoC.”