“I don’t think it’s a done deal that they’re finished by any means, but at least they left open the possibility. They’re asking the question whether they have to raise rates any further and that’s a big change from last time when they said that there’s a clear need for further interest rate increases, so we are definitely getting closer. If not at the end, we’re getting very close to the end.”

What could make the Bank of Canada hike rates again?

Two CPI (consumer price index) reports due to be published between now and the Bank’s next rate decision on January 25 will be critically important to whether the central bank decides to make another hike, according to Porter.

Those will reveal whether underlying inflation remains at current moderate levels, decreases slightly, or starts to tick upwards again. Other economic reports are also important, Porter said – “but I think it really will come down to watching the CPI reports.”

There are positive signs on that front, he added, with gasoline prices having come down substantially and house prices also moderating noticeably in recent months.

Bank of Canada increases policy interest rate by 50 basis points, continues quantitative tighteninghttps://t.co/2cWKjTAQK3 #economy #cdnecon

— Bank of Canada (@bankofcanada) December 7, 2022

“We are seeing further cooling down in the housing market: whether it’s home prices or new home prices, they’re receding, and that’s also helping somewhat to cap inflation, too,” he said. “So I think there are some encouraging developments. But as the Bank said, inflation is still pretty high. And we need a few months of these good reports to really give them some comfort.”