At central banks, caution is a virtue, so they tend to like to move up and down slowly, in 25-point increments, or a quarter of a percentage point at a time. The Bank of Canada has made it clear that it will hike its benchmark interest rate in the months to come. Variable rate loans are pegged to the central bank's rate, and they've been inching higher in recent weeks, in anticipation of the bank's move. If Capistrán's projections are right and the Bank of Canada rate is headed to 3.25, expect variable rates to make a similar leap. "What the central bank is trying to do and what we are all hoping for is what we call a soft landing," Capistrán said.

Source: CBC News April 01, 2022 00:43 UTC