WAS IT THE RIGHT TIME FOR THE FORSST INTEREST RATE INCREASE SINCE 2018?

James Laird (pictured), RateHub.ca co-founder and CanWise Financial president told Canadian Mortgage Professional that the announcement contained no deviations from the Bank’s indication of its course in January, except for references to the Russia-Ukraine crisis that has escalated since then.

“I think it was the right move and except for the conflict [Russia’s invasion of Ukraine], it was a very close continuation of their January announcement,” he said. “They foreshadowed this in a lot of detail in January, and all of the exact themes continued except for Russia-Ukraine.”

The central bank noted in Wednesday’s statement that economies across the world were beginning to recover from COVID-19 setbacks earlier than anticipated, even despite the continued prevalence of the virus and possible emergence of further variants.

It also said that Canada’s economy had posted a stronger-than-expected performance in 2021’s fourth quarter, with economic growth of 6.7% showing that slack has largely been absorbed.

That’s set the stage for further Bank rate hikes throughout the year, with the annual rate of inflation – currently at its highest level for over 30 years – remaining a considerable concern. Laird said he expected four to six quarter-point benchmark rate increases during the 2022 calendar year.