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2025-11-01 02:01:39
Some analysts believe the Bank of Canada may have rushed into signaling an end to rate cuts. Avery Shenfeld, chief economist at CIBC Capital Markets, argues that given the current weakness of the Canadian economy, the Bank of Canada should have avoided explicitly defining an "appropriate interest rate level." In his weekly client report, he wrote, "Is the central bank truly out of options? Does the patient need such a diagnosis at this point?" While the Bank of Canada lowered its policy rate this week and hinted at a possible end to the easing cycle, Shenfeld analyzes that although the bank predicts weak economic growth and sets 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.
