This afternoon UK time, the Bank of Canada (BoC) will announce its regular interest rate decision - and after the developments of the past few weeks, there is much to suggest that it will accelerate the pace of rate cuts, Commerzbank’s FX Analyst Michael Pfister notes.
This afternoon UK time, the Bank of Canada will announce its regular interest rate decision - and after the developments of the past few weeks, there is much to suggest that it will accelerate the pace of rate cuts, Commerzbank’s FX Analyst Michael Pfister notes. Monetary policy remains too restrictive “Just a few weeks ago, BoC Governor Tiff Macklem hinted that larger moves might be appropriate at upcoming meetings.
” “As a result, Canadian one-year inflation expectations are now only 1.2%, roughly in line with the average for the 2010s, when the policy rate was also significantly lower on average. Or to put it more succinctly: Despite the three rate cuts of 25 basis points so far, monetary policy remains too restrictive because inflation has collapsed at the same time.” “Today's larger cut should therefore no longer come as a surprise.
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