Bank Of Canada Blinks, Stocks Should Next

Summary

• The Bank of Canada undershot its previously telegraphed +.75bps rate hike with a +50bps hike.
• While the US and Canadian central banks both say there’s more tightening yet to do, what they’ve already done will slow demand and drive up unemployment for many months.
• Stocks and bonds have rallied this week on the inking that central banks may be nearing the end of their hiking efforts.

Marc Dufresne

Too loose for too long, central banks have responded to lagging inflationary pressures in 2022 with the sharpest six-month tightening cycle on record.

The Bank of Canada (BOC) was in the batter’s box this morning and after raising its