High Inflation is Temporary, But Will Persist Through Year-End: BoC

The Bank of Canada revised its inflation forecast upwards for 2021 and 2022 but maintains that it will be "transitory." Inflation is expected to run above 3% in the second half of 2021 before easing back toward 2% in 2022. The bank maintains that it will hold the policy rate at its current record-low level until the second half of 2022. For variable-rate mortgage holders, this means potentially another year with no change to the prime rate and therefore no change to their monthly mortgage payments. However, once rates start rising, the pace could be swift, and fixed rates may win based on interest cost alone.