Bank of Canada cuts benchmark rate by 50 basis points
TORONTO, Oct 23 (Reuters) -The Bank of Canada on Wednesday reduced its key benchmark rate by 50 basis points to 3.75%, its first bigger-than-usual move in more than four years, and hailed signs the country had returned to an era of low inflation.
MARKET REACTION: CAD/
LINK: https://www.bankofcanada.ca/2024/10/fad-press-release-2024-10-23/
COMMENTS
DOUG PORTER, CHIEF ECONOMIST AT BMO CAPITAL MARKETS
"No surprise at all in terms of the rate decision. The market was very heavily priced for a half-point cut. So that part of it largely stuck to the script."
"What caught my eye is that there's almost no net change in the economic forecast. When we look at the overall growth rates for this year and next - whether it's growth or inflation - it's basically as the Bank of Canada expected in July. Inflation is slightly lower, but we're talking tenths of a percent, and the growth forecast is essentially the same. So I'm not sure that this outsize cut sets a precedent. Looking ahead, it may well be the case that this is a bit of a one-off and that the bank now reverts back to quarter-point cuts, depending on how the economy fares in the months ahead."
Reporting by Fergal Smith, Anna Mehler Paperny and Ismail Shakil; Editing by Caroline Stauffer
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