The Bank of Canada will hold its key interest rate near the current level of 5% until the third quarter of 2024, economists say, with growth picking up momentum to end this year.

Governor Tiff Macklem and his policymakers are finished hiking, according to the median response in a Bloomberg survey of economists. But the central bank will cut rates only once in the first half of next year, according to the survey, and the policy rate will still be at 3.5% in early 2025.

That’s a change from earlier surveys in which economists saw the Bank of Canada cutting rates more quickly. The forecast for long-bond yields is also higher — the 30-year note is now expected to stay above 3% into early 2025.

Shifting expectations for global rates have roiled bonds and equities in recent days after the US Federal Reserve’s policymaking committee signaled one more rate hike this year and a high probability that borrowing costs will stay elevated in 2024 and 2025.

Canada’s economy may be more sensitive to higher interest rates than the US because of the different structure of its mortgage market, as most borrowers are unable to lock in fixed rates for longer than five years. Even so, its economy tends to get pulled along by robust growth in the US, the buyer of the vast majority of Canadian exports.

That’s one reason economists see Canada avoiding a recession. They forecast growth of 0.3% in the fourth quarter of this year, an upgrade from the last survey where they predicted zero growth, and the economy picking up speed in 2024.

--With assistance from Sarina Yoo.

(Updates with additional information and chart)