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100 Or Bust
Back in July, when the Bank of Canada aimed a 100bps rocket-propelled grenade at the country's infla
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H-Man, it will be interesting tomorrow to see if Powell can deliver a “risk off” message. Unfortunately, his track record suggests he will say something that turns “risk on”. But you never know.
“100 bps is a necessity to stay front-footed on hitting the demand-side of inflation as hard as possible,” McElligott said in a note to clients on Tuesday.
In Canada, Trudeau and his financial illiterate finance minister are still showering money to the class with the highest propensity to spend, throwing more gasoline to the inflation fire. Anecdotally, I am seeing inflation is getting more wide spread here with all service sectors increasing price by 10+% (i.e. car service, dental, restaurant). With the declining Canadian dollar (so far mainly against US dollar), inflation will only go higher, forcing BoC to hike more aggressively. I hope Trudeau doesn’t make the same mistake as Liz, but my confident is not high, as the minority government is prop up by the left leaning party.