“Interest rate cut storm” is coming! The Bank of Canada has announced a 50 basis point cut in interest rates!
Hawk News
2024-10-24 16:09:35
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The Bank of Canada announced a 50 basis point rate cut to reduce the benchmark interest rate from 4.25% to 3.75%. This is the fourth consecutive time the Bank of Canada has cut interest rates, and has cut interest rates by 25 basis points three times previously.
Perhaps the main reason for the Bank of Canada's sudden sharp interest rate cut is that the downside risks to the Canadian economy are increasing. Previously, many institutions believed that the Bank of Canada would further cut interest rates to prevent the economic weakness from continuing into 2025, and it is expected to cut interest rates by another 50 basis points in December.
The Bank of Canada said that the timing and pace of future interest rate cuts will be guided by upcoming data, reiterating that if the economy develops in line with expectations, further interest rates may be cut significantly. The aim is to boost economic growth and keep inflation near 2%. Slowing business/consumer spending is the biggest downside risk under CPI.
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