Goldman Sachs (quick) preview of Wednesday's (13 July 2022) Bank of Canada policy meeting

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• "We expect the BoC to act "more forcefully" and hike the policy rate by 75bp this week to 2.25%. Beyond this week, we expect another 75bp hike in September, 50bp hikes in October and December, and a 4.25% terminal rate reached in Q1. The main drivers of our hawkish BoC call are that we expect headline CPI inflation Inflation Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Read this Term to remain above 7% this year and for the BoC to respond aggressively to any signs of entrenched inflation," GS notes.
• "Risks to our hawkish terminal rate forecast are to the downside. A more significant US growth slowdown or a crash in the housing market would likely mean that the BoC hikes less in December and January than we expect" GS adds.

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