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2025-10-29 22:12:51
[Bank of Canada Hints at End of Rate-Cutting Cycle; Money Markets Price No Rate Cuts Before March] The Bank of Canada cut its main overnight rate to 2.25% on Wednesday, the lowest level since July 2022, in line with market expectations, and hinted that this could mark the end of its rate-cutting cycle unless the inflation and economic outlook changes. Bank of Canada Governor Macklem stated that this easing policy aims to help the economy cope with the disruption caused by US tariffs while keeping inflation near the 2% target. At the same time, the Bank of Canada lowered its economic growth forecasts for this year and next year to 1.2% and 1.1%, respectively, from 1.8%, citing the impact of US trade policy. The Bank of Canada forecasts inflation of 2% in 2025 and approximately 2.1% in 2026. Macklem stated that due to the continued unpredictability of US trade policy, the range of possible outcomes remains wider than usual. Following the Bank of Canada's interest rate decision, the Canadian dollar strengthened, and the money market priced in no rate cuts before March next year.
