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2025-11-01 01:54:38
[CIBC: Bank of Canada's Signal to "End Rate Cuts" May Be Premature] Avery Shenfeld, Chief Economist at CIBC Capital Markets, points out that given the current weakness of the Canadian economy, the Bank of Canada should have avoided explicitly defining an "appropriate interest rate level." He stated, "Is the central bank truly out of options? Does a patient need to hear such a diagnosis at this time?" This week, the Bank of Canada lowered its policy rate, hinting at a possible end to the easing cycle. Shenfeld analyzes that although the bank predicts weak economic growth, setting a high threshold for further rate cuts, its own forecasting models support further rate cuts due to the slow digestion of excess capacity. This misalignment between policy guidance and economic reality may confuse the market.
