*The Bank of Canada should uphold its conditional pledge to keep its key policy rate at 0.25% until July but should then embark on sharp rate hikes of 50 basis points at every announcement date until mid-2011, says an analysis prepared for the CD Howe Institute.
*The call for sharp rate increases after June emerged today – one week before the Bank of Canada releases its latest interest-rate statement.
*Further, recent data indicate the Canadian economy likely expanded in the final quarter of 2009 at a faster pace than the central bank expected (4% vs 3.3%), and inflation is now closer to the central bank’s 2% preferred target than it previously envisaged. Click here to read the full article in the Financial Post.