Central banks are not done yet. Given the inflation outlook, economists at the Bank of Montreal expect further rate hikes even into the second half of 2023.

Core inflation will prove to be more persistent

“We look for headline and especially core inflation trends to still be north of 3% by the end of 2023, simply too high for central bank comfort.”

“Given our view on core inflation, we believe the main story is that there will be no scope for rate cuts in the year ahead, and that central banks will maintain these relatively high rates until underlying inflation is truly cracked – and that process will take time. We don’t look for rate relief until 2024.”