Bank of Canada rate cuts are still on the table, say economists

The Bank of Canada may still cut interest rates further, say economists. Photo by Postmedia

The Bank of Canada made it plain yesterday that this might be it for rate relief.

Canada’s central bank cut its interest rate by 25 basis points to 2.25 per cent, but its main takeaway was that if the economy behaves as forecast this rate is “at about the right level.”

The bank’s argument is that there is a limit to how much monetary policy can support the economy through the “structural transition” that Donald Trump’s trade war has brought about. Time for Ottawa to step in.

Markets took this to heart and cut odds of a rate reduction in December to 7 per cent, and 35 per cent for next year.

Despite that, some economists still believe the Bank of Canada will have to step back into the fr