“With the market pricing in an aggressive Bank of Canada tightening cycle, it implies that inflation is less likely to remain elevated,” said Andrew Kelvin, chief Canada strategist at TD Securities.
TORONTO: The Canadian bond market is coming to the view that expected multiple interest rate hikes in 2022 by the Bank of Canada (BoC), including one potentially this week, will bring price pressures under control, albeit at a cost of slower economic growth.
This marks a shift in perception that is underscored by moves in the so-called inflation breakeven rate, a market measure of inflation expectations.
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