One of the country’s biggest lenders says the Bank of Canada will accelerate the pace of monetary easing in order to stave off recession.
Erik Hertzberg and Jay Zhao-Murray, Bloomberg NewsAmanda Lang discusses the Bank of Canada ’s decision to cut lending rates with CIBC economist Benjamin Tal and gets his take on what it means for Canada ’s econom
“It really is time to declare victory in the battle against inflation and get the economy moving again,” Avery Shenfeld, CIBC’s chief economist, said in an phone interview. “There’s no reason not to speed up the process of getting interest rates down materially.” The Bank of Canada started reducing the benchmark overnight rate in June, and has since lowered it by 25 basis points at its July and September meetings, bringing the rate to 4.25% from 5% at the peak of the hiking cycle.
Former Bank of Canada Governor Stephen Poloz said separately on Thursday there may be a case for cutting rates beyond that midpoint “if the downside risks do build up more” to cushion the economy. The rest of the top Canadian lenders — Bank of Montreal, Toronto Dominion Bank, Royal Bank of Canada and the Bank of Nova Scotia — still expect Macklem to ease borrowing costs in 25 basis-point increments.
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