Up, down, or stagnant? What do brokers forecast for the overnight rate?

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It’s time to have your say and vote on when – and if – the Bank of Canada will change its overnight rate this year. Take our latest poll.

Throughout 2014, many believed this year might be the first time since 2010 that the central bank would hike its benchmark rate – with the BoC, itself, even hinting at the eventual changes. However, some are now considering a rate cut.

“Markets are pricing in a 4-per-cent probability of an interest rate cut in Canada over the next 12 months,” Camilla Sutton, chief currency strategist of Bank of Nova Scotia told the Globe and Mail Tuesday.

Do brokers agree?

Have your say by taking our poll.
  • Lawrence Kobescak on 2015-01-14 11:35:47 AM

    No change for 2015 should be added to that poll on overnight lending rate so that I can vote. No change in 2015.

  • Jeremy on 2015-01-14 11:39:34 AM

    BOC will cut its overnight rate, but Prime rate will remain stagnant.

  • Mitch Thibodeau on 2015-01-14 11:39:40 AM

    I agree. There should be a "no change" option on the poll.

  • Broker on 2015-01-14 11:41:09 AM

    BOC has discussed the importance of inflation and strength of our economy. This has been one of the major factors in keeping rates low to allow our rate of inflation to remain on track. This year with oil slowing our economy, an issue that we don't have an immediate solution for, would actually be the worst year to increase rates. It goes against everything they have ever said about why they keep rates low. This would probably be one of the worst times in the last 5+ years to increase rates. First solve the oil, then worry about rates.

  • Mike on 2015-01-14 11:53:37 AM

    What about the BoC dropping its rate. Western Canada economy will stall. According to our experts house prices will drop dramatically which will cause people to walk away and real estate projects to go bankrupt.
    New terror threats will keep the US rates in check.

  • Daryl on 2015-01-14 12:08:38 PM

    I agree. Can't vote until I see the "no change" option added.

  • Eric I on 2015-01-14 12:54:21 PM

    I am predicting Prime Rate will increase in 2015 - The value of real estate in key markets such as Toronto and Vancouver will continue to appreciate and all the other attempts by CMHC and OFSI to control the market, have been exhausted.

    Given the points below:
    •Statistics Canada reported October GDP results two days before Christmas. The Canadian economy grew by 0.3% in October - HIGHER than the 0.1% which economists were expecting.
    •The US Department of Commerce 3rd quarter GDP results showed that the American economy grew by an IMPRESSIVE annual rate of 5% in the quarter, its fastest growth since 2003.
    •World crude oil prices continue to fall to levels that have not been seen in recent memory. On the way back from a client meeting in the East end this afternoon, I spotted fuel prices as low as 87.90 per litre!
    •The Canadian dollar is trading at $0.86 US

    I expect the Canadian economy will continue to perform and a minor rate hike, unlikely to really do any damage.

  • JSydneyH on 2015-01-14 1:40:04 PM

    Europe is entering a deflation cycle, Japan is still struggling, China can't get the growth on track, world commodities prices are in free-fall, several of the emerging economies are limping along, south east Asia is hobbling along, US is still reeling but looks promising - and we're worried the BoC might raise interest rates. All indications are there should be a rate cut soon, but that is unlikely.

    There is a Canadian election coming up this year, and the Harper government does not want to enter the election with the economy in a tail spin; if rates increase, even .1%, business will slam the brakes on investment, which will require billions of stimulus money to get the economy going again.

    I'm holding for no increase in the overnight rate until early to mid 2016.

  • Alfredo Borrello on 2015-01-14 2:00:36 PM

    I personally think the BOC will only increase the overnight lending rate by .25% in 2015. Our economy is still very fragile. Key period is end of first quarter of 2016, at this point, rate might drop or rise again. Tic Toc Tic Toc :-)

  • Steve on 2015-01-14 2:25:48 PM

    Job losses in Alberta will lead the news for months. Ontario, Atlantic provinces and Quebec have not been good news stories for years. Immigration swells price in Vancouver and Toronto. A low Canadian dollar may invite more immigration, but markets are not made in 2 cities. I see tax revenues falling, I see layoffs and I see a struggling blue color class. Government will be desperate to stimulate the economy. All talk about inflation will be trumped by need to generate tax dollars. I am calling for a 25 bp rate drop :).

  • Ron Miller on 2015-01-15 12:57:23 PM

    .25 rate increase in the 4th quarter after the election. US economy is very strong.

  • Steve on 2015-01-21 6:42:56 PM

    I was right! Now how do I get my wife to look at this post so I can get a high 5? Who am I kidding, I may as well have chosen the winner of the super bowl. When it comes to numbers, it appears opposites do attract

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