The Bank of Canada (BoC) made a jumbo-sized cut in October, lowering the policy interest rate from 4.25 per cent to 3.75 per cent. Such a low has not…
The Bank of Canada made a jumbo-sized cut in October, lowering the policy interest rate from 4.25 per cent to 3.75 per cent. Such a low has not been seen since December 2022.
"The BoC could lean toward a larger cut following the most recent GDP report, which not only showed quarterly growth underperforming the Bank's own forecast, but that the per-capita measure contracted for the sixth consecutive time. It's clear Canadian citizens and businesses are increasingly feeling the effects of deepening 'me-cession' and the steep cost of living."
"As maintaining labour market stability is a priority for the BoC, November's increased unemployment rate could increase the chance of a half-point cut rather than a quarter." "When conditions are too weak, the BoC cuts its benchmark interest rate to make it easier for consumers and businesses to access credit and to promote spending. When the economy runs too hot, however – as it did following the lifting of pandemic lockdowns in 2022 – the bank needs to hike rates, to slow spending and keep a lid on inflation growth," Graham added.
"A technical one is a superficial definition that you have two-quarters of negative growth in a row, and we haven't had that, but the reason is that we've been swamped with new immigrants who buy the basics in life, and that boosts our consumption enough."Rising inflation and the possibility of higher tariffs have made for a pretty volatile bond market. Add to that a slower easing pace from the US Federal Reserve.
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