When will the Bank of Canada raise interest rates?

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Taking current trends into account, the Bank of Canada will likely raise its benchmark interest rate during its Jan. 26 meeting, significantly ahead of its previously announced rate-hike timeline, according to a J.P. Morgan economist.

The central bank is expected to hike its benchmark rate by 25 basis points to 0.5% in January, with as much as five rate hikes this year pushing the benchmark rate to 1.5% by the end of 2022, said Silvana Dimino, a New York-based economist at J.P. Morgan.

“Based on rhetoric from the Bank of Canada in December, it was clear that labour market dynamics and outperforming economic data had created heightened concerns at the bank that the output gap was closing more rapidly than expected,” Dimino said.

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