J.P.Morgan and Goldman Sachs said on Wednesday they now expect the Bank of Canada (BoC) to deliver one last 25-basis point rate hike in October and lifted their terminal rate forecast to 5.25%.
The revised forecast came after the BoC hiked its key overnight rate by a quarter of a percentage point on Wednesday to a 22-year high of 5% and said it could raise rates further due to the risk of inflation stalling above its 2% target.
Both Wall Street banks had earlier expected the BoC to end the cycle with a terminal rate of 5%.
Goldman Sachs, however, warned that the final rate hike "could be pulled forward to September if upcoming activity and inflation data surprise to the upside."
(Reporting by Roshan Abraham in Bengaluru; Editing by Janane Venkatraman and Sonia Cheema)
