[Azure]

Another rate hike from the Bank of Canada this week risks pushing the Canadian economy into a deep recession that could cost hundreds of thousands of people their jobs, a growing number of economists worry.

The Bank is set to announce Wednesday morning whether it will be raising its key overnight lending rate for the eighth straight time, and markets are already pricing in a 25 basis-point (quarter of a percentage point) hike.

That increase, said economist Jim Stanford, would be a grievous mistake for a simple reason: The economy still hasn’t felt the full impact of the seven rate hikes in 2022, and is already struggling.

“I’m still convinced we’re likely facing a recession this year and it will be all the deeper if the Bank of Canada continues this single-minded crusade,” said Stanford, chief economist at the Centre for Future Work.

“Even if they don’t raise rates, we’re going to see increasing slowdown from the rate increases that are already in the pipeline. So adding more would obviously make that even worse,” said Stanford.

If there’s a mild “technical” recession — two straight quarters of shrinking GDP — there might not be many jobs lost. But a deeper recession could mean 300,000 people losing their jobs, and the unemployment rate hitting nine per cent, said Stanford.

Bank of Canada governor Tiff Macklem has made it clear, said Stanford, that he’s committed to bringing inflation down to the Bank’s target of two per cent. Despite last year’s series of hikes, the Consumer Price Index — a broad-based measure of inflation — was 6.3 per cent higher in December than it was a year earlier, Statistics Canada announced last week.

“The Bank has said, quite clearly, they’re going to get inflation down to two per cent no matter what. And while headline inflation has come down, it’s nowhere near two per cent,” said Stanford.

Macklem has also expressed concern that the relatively low unemployment rate is pushing inflation. That means, said Stanford, that the Bank is actively pushing for people to lose their jobs, making an interest rate hike Wednesday almost a certainty.

“Tiff Macklem has been explicit in saying that five per cent unemployment is too low,” said Stanford.

https://www.thestar.com/business/202...ists-warn.html

I mean I'm optimistic and want job rates to increase, unemployment to go down, wages to go up, but at this point we should all hope those things don't happen because it will all just lead to another rate increase.

Hard to imagine anyone in the Federal Government who is watching this isn't extremely concerned with this tunnel visioned approach.