Trudeau's government thinks the Bank of Canada raised rates too soon
A report is doing the rounds that cites anonymous sources "within Prime Minister Justin Trudeau's government" that are upset the Bank of Canada hiked rates.
They are concerned the BOC "is moving too quickly to raise interest rates, fearing higher borrowing costs could inadvertently trigger a downturn," according to Bloomberg. "The scale of concern varies among the officials."
One thing you need to know about Ottawa is that it's not like Europe or Washington where everything leaks. Reports like this are rare and it's from Bloomberg so it's almost certainly legit.
USD/CAD is up 76 pips today to wipe out yesterday's decline. The pair has swan dived from 1.35 in the past six week as the BOC signaled, then executed a rate hike. The jump in the loonie is deflationary and that alone could cause the BOC a rethink.
If the displeasure in Ottawa is real it could also cost current BOC deputy Carolyn Wilkins the post as the next BOC Governor. She's the favourite but could lose out to someone more inclined to keep rates low.
