CIBC predicts the Bank of Canada (BoC) will push for more aggressive rate cuts, and Canadians could see a significant drop as soon as December.
In June, the Bank dropped the interest rate from a longstanding 5% to 4.75%. That move was the first in more than four years, following six rate holds. Another quarter-point cut followed in July, bringing the rate to 4.5%. Then, in September, the BoC cut the key interest rate to 4.25%.
CIBC economists and other industry experts expect a quarter-point cut in October.
In its Economics Forecast report published on September 12, CIBC predicts that something more aggressive will occur within less than five months — two half-point cuts in December and January.
This means we could potentially see the rate drop to 3% in January.
“That’s in contrast to a prior forecast that had rates easing at 25 basis points at a time, and we no longer expect any pauses on the path to less restrictive rates,” CIBC economist Avery Shenfeld said in the report.
Full article below:
