Canada's Interest Rate Hike Looms Amid Global Inflation Concerns

The Bank of Canada is expected to raise interest rates in October, according to Garth Turner. The odds are close to 70% that Tiff Macklem will increase borrowing costs by a quarter point, with more hikes to follow.

This decision comes amidst rising global bond yields and inflation concerns. The yield curve has become steep, putting pressure on central banks to raise short-term rates to combat the impact on the economy. Long-term rates are surging ahead of short-term ones as investors demand a premium for holding debt into the future.

The main driver behind this shift is inflation, which markets expect to continue rising due to factors such as higher oil prices and global trade disruptions. The US Federal Reserve has already hiked interest rates, and other major central banks have followed suit.