MNI BRIEF: Canada Commits To Just One Of Three Fiscal Anchors

MNI BRIEF: German Insolvency Rate Slows, 2025 Pickup Expected

MNI BRIEF: Brazil Not Even Close To Fiscal Dominance - David

CORRECTED-MNI BRIEF: Brazil Inflation Rises To 4.87% In Nov

MNI China Daily Summary: Tuesday, December 10

MNI: USDA: 2024/2025 CORN PRODUCTION EST 15.14B BSL

EZ/UK T-Bill Calendar: 12-Month BOT Auction on Wednesday

EZ/UK Bond Supply Calendar: 4.25% Jul-34 Gilt Due Wednesday

MNI EXCLUSIVE: EU-Mercosur Deal Close, But Likely Short-Lived - Officials

AUSTRALIA: 2025 Election Outcome Looking More Uncertain According To Newspoll

© 1982-2024 MNI. All rights reserved.
Terms | Privacy
Log Out
Free Trial

BOC Cuts Rates 50BPs, More Reductions Could Be Expected

BOC
Bank of CanadaCentral Bank NewsPolicy NewsHomepagemarkets-real-timeBulletBriefMarketsFixed Income BulletsForeign Exchange Bullets
  • Bank of Canada cut interest rates for a fourth time in a row, by 50bps to 3.75% in line with economist and market expectations. Prior three cuts were 25bps and BoC says it took a bigger step as inflation is now back to the 2% target and it wants to keep it close to target.  
  • "Now our focus is to maintain low, stable inflation. We need to stick the landing," Macklem says in press conference statement. 
  • BoC says further cuts are seen if the economy advances as expected, but it does not commit to any specific pace. 
  • In its Monetary Policy Report, BOC's growth forecast for 2024 and 2025 were largely unchanged from July MPR at 1.2% and 2.1% respectively. 
  • BoC also says inflation is expected to be around 2% in October after declining to 1.6% in September. CPI inflation forecast for 2024 is 2.5% from 2.6% in the last report. The 2025 inflation forecast is lower at 2.2% from 2.4% in July MPR assuming lower energy prices. Core inflation is expected to gradually decline to 2% by Q4 2026. 
  • In terms of the quarterly projections, Q3 GDP forecast lowered to 1.5% from 2.8% in the July report. First half GDP revised up. Q4 2024 inflation estimate down to 2.1% from 2.4% in the last report. 
  • Risks around inflation are reasonably balanced, BoC says. Downside risk from household spending and on the upside, a rebound in housing or wage growth. 
  • "The Bank forecasts inflation will remain close to the target over the projection horizon. The upward pressure from shelter and other services is expected to gradually diminish. With stronger demand, the downward pressure on inflation is also forecast to dissipate, keeping the upward and downward forces roughly balanced. If the economy evolves broadly in line with this forecast, we anticipate cutting our policy rate further to support demand and keep inflation on target," Macklem said. 
315 words

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
  • Bank of Canada cut interest rates for a fourth time in a row, by 50bps to 3.75% in line with economist and market expectations. Prior three cuts were 25bps and BoC says it took a bigger step as inflation is now back to the 2% target and it wants to keep it close to target.  
  • "Now our focus is to maintain low, stable inflation. We need to stick the landing," Macklem says in press conference statement. 
  • BoC says further cuts are seen if the economy advances as expected, but it does not commit to any specific pace. 
  • In its Monetary Policy Report, BOC's growth forecast for 2024 and 2025 were largely unchanged from July MPR at 1.2% and 2.1% respectively. 
  • BoC also says inflation is expected to be around 2% in October after declining to 1.6% in September. CPI inflation forecast for 2024 is 2.5% from 2.6% in the last report. The 2025 inflation forecast is lower at 2.2% from 2.4% in July MPR assuming lower energy prices. Core inflation is expected to gradually decline to 2% by Q4 2026. 
  • In terms of the quarterly projections, Q3 GDP forecast lowered to 1.5% from 2.8% in the July report. First half GDP revised up. Q4 2024 inflation estimate down to 2.1% from 2.4% in the last report. 
  • Risks around inflation are reasonably balanced, BoC says. Downside risk from household spending and on the upside, a rebound in housing or wage growth. 
  • "The Bank forecasts inflation will remain close to the target over the projection horizon. The upward pressure from shelter and other services is expected to gradually diminish. With stronger demand, the downward pressure on inflation is also forecast to dissipate, keeping the upward and downward forces roughly balanced. If the economy evolves broadly in line with this forecast, we anticipate cutting our policy rate further to support demand and keep inflation on target," Macklem said.