We see BoC hiking rates as high as 6%: BMO’s Earl Davis
Earl Davis, head of fixed income at BMO Global Asset Management, tells BNN Bloomberg that the Bank of Canada’s 100 bps rate hike today is a jump towards acceleration and higher terminal rates. He says the BoC is still behind the curve and will have to hike rates beyond 3 per cent just to start tightening, and will eventually have to take rates higher than inflation. “The cure for inflation is a recession,” he adds, calling the higher than expected U.S. inflation data “a canary in the coal mine for Canada”.