Where is the source of the news? If possible, could you please share?
I am not suprised to hear the news even though 175pp by the end of 2010 is a bit upexpected...
see below:
Canada, U.S. will raise rates by Q1 of 2010: economists
Financial PostJune 5, 2009
The Bank of Canada and the U.S. Federal Reserve will begin raising interest rates as early as the first quarter of next year, the Bank of Nova Scotia forecast on Thursday.
In a global forecast update, one of the previously more bearish banks on Bay Street also revised up its growth forecasts as central bank and government stimulus, along with strong cyclical forces, help the world transition from "recession to recovery."
Warren Jestin, chief economist at Bank of Nova Scotia, and Aaron Gampel, deputy chief economist, expect the Fed to begin raising its fed funds rate early in 2010, with a cumulative increase pegged at 225 basis points.
"Following the Fed's lead, the Bank of Canada will also begin tightening policy later in (first quarter) 2010, with the total increase in the overnight rate projected at 175 basis points next year," the bank said in its report.
U.S. rates currently stand at 0 per cent to 0.25 per cent, while Canada's benchmark rate is at 0.25 per cent.
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