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  • North American Outlook

    February 07, 2022 | 08:57

    Bracing For Rate Hikes

    profile photo of Sal Guatieri

    Sal Guatieri

    Senior Economist and Director
    Economics

    Sal Guatieri is a Senior Economist and Director at BMO Capital Markets, with over two decades experience as a ma... (Read more)

    profile photo of Sal Guatieri

    Sal Guatieri

    Senior Economist and Director
    Economics

    Sal Guatieri is a Senior Economist and Director at BMO Capital Markets, with over two decades experience as a ma... (Read more)

    More
    Key Summary

    The North American economy faces slower though still decent growth in 2022, as the fading impact of the pandemic is replaced by the growing impact of interest rate increases to tame inflation.


    Inflation should begin to roll over this spring but will remain uncomfortably high for a while, with upside risks given very taut labour markets, rising energy costs, and surging house prices.


    After delaying rate hikes until March, the Fed and Bank of Canada will need to race to get ahead of inflation, and may need to run faster than usual to catch up, posing a threat to the expansion.


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