Bank of Canada widely expected to cut interest rates
Nearly 93% chance of quarter-point cut, swap markets suggest
Move would be first by G7 central bank since 2020
The Bank of Canada is widely expected to cut interest rates on Wednesday, according to a new report. Swap markets now suggest nearly 93 per cent odds of another quarter-point cut, which would be the first by a G7 central bank since 2020.
The move would come as a surprise to few. Last month, the Bank of Canada cut the policy rate for the first time in four years, and economists believe the central bank is now preparing to cut rates again. A rate cut is fully priced into the market by the banks July meeting.
The Bank of Canada is holding its benchmark lending rate at five per cent but warned that it was prepared to hike rates if necessary. However, over 60 of economists (19 of 31) in a Feb 26-28 Reuters poll expect the BoC to cut its key rate by 25 basis points to 4.75 per cent.
Just over 75 of economists (22 of 29) in a May 23-29 poll predicted the BoC would cut its key interest rate by 25 basis points to 4.5 per cent.
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