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Recession a line in the sand for the Bank

The Bank of Canada now judges that there is a 50/50 chance of GDP growth turning negative, which caused it to slow the pace of its tightening to a 50 bp hike this week and to hint that it will drop to a 25 bp at the final meeting of the year. We assume that there are still two 25 bp hikes to come, resulting in a peak policy rate of 4.25%.

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