📝The Bar For Another BoC Rate Hike Has Been Raised: TD

No surprises today as the BoC held the policy rate at 5%. With last week's GDP release showing a contraction in the second quarter, and growing signs of a cooling in the job market, there was little pressure for the BoC to keep raising rates. Our expectation is that this period of "weak economic growth" is set to continue over the rest of this year and into early 2024.

Although the BoC has moved back to the sidelines, it doesn't mean it will let up on its hawkish rhetoric. It needs to make sure that financial conditions remain tight for the economy to continue to slow. Markets are still in the 'will they, won't they' camp, with pricing for another hike around 50%. Given that the slowdown looks to continue, we think the bar for another hike has been raised. - TD Securities