KPMG Canada economist Daniel Hyun says the Bank of Canada faces a difficult
trade-off: current conditions still warrant some monetary easing while inflation
risks are rising. Canadian employment fell for a second consecutive month, and
September payrolls were notably weak, complicating the case for a December hike.
Hyun nonetheless expects the BOC to raise rates 25bp in December, citing the
bank’s exposure to upside inflation risks and pressure to defend policy
credibility.
