FILE PHOTO: A view shows a Bank of Canada building in Ottawa, Ontario, Canada December 11, 2024. REUTERS/Blair Gable/File Photo

TORONTO (Reuters) -The Bank of Canada on Wednesday lowered its benchmark interest rate by 25 basis points to 2.5%, its first cut in six months.

MARKET REACTION: [CAD/]

LINK:

COMMENTS

ANDREW KELVIN, HEAD OF CANADIAN AND GLOBAL RATES STRATEGY, TD SECURITIES

"It's largely as expected. They didn't really adjust their forward guidance very much. They continue to argue they're going to proceed carefully. They said again that they will be looking at shorter horizons than usual in terms of not having quite as forward-looking a process for monetary policy."

"The data over the last two months has been softer than it was in the prior two months which tipped the balance of risk in favor of rate cuts as expressed by the clear consensus in Governing Council. I continue to look for another rate cut in October. I think 2.25(%) is the terminal interest rate level I am very comfortable with."

DOUG PORTER, CHIEF ECONOMIST AT BMO CAPITAL MARKETS

"I would say this is pretty much right down the middle of expectations. I thought the explanation of how the risks have shifted since the last meeting was quite clear. There's no major change in terms of the four things to keep an eye on and, you know, what's going to guide their decision. And I would say that the bank was fairly careful not to lay out a specific guidance for what happens next. I would characterize this as still being very dependent on events. ... They essentially say that the upward pressure they saw on underlying inflation earlier this year has diminished. And you know, it wasn't obvious to me they would go that far. But I think that's a pretty important comment."

(Reporting by Fergal Smith and Anna Mehler Paperny; Editing by Caroline Stauffer)