What to expect from inflation, interest rates and the housing market in 2023

By Victoria Wells
The Financial Post
January 4, 2023
Category: Finance & Economics
Region: Canada

Canada is likely in for another year of elevated inflation, at least one more interest rate hike and a continued downturn in the housing market, BMO said in a note predicting the top economic trends for 2023. …An inflation rate of three per cent or more is much too high for the Bank of Canada’s comfort. …BMO expects at least one more interest rate hike this year, with even more expected in the US and Europe. It also means consumers shouldn’t bet on interest rates coming down this year. …The economy won’t be able to escape central bankers’ medicine to tame inflation, and BMO predicts Canada will succumb to a mild recession sometime in 2023. …Meanwhile, persistent high interest rates will continue to wallop the housing market. BMO expects home prices to drop a further 12 per cent, sales to fall 15 per cent and homebuilding to crater this year.

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