RBC: BoC to cut before a flat GDP print for Canada in August
The Bank of Canada is expected to cut its policy rate again on Wednesday, even as Canada’s August GDP is forecast to remain flat, according to guidance by RBC Economics. The report notes that while the U.S. Federal Reserve is also expected to lower rates, the BoC’s move is “less straightforward” given that it has already “cut interest rates significantly more than the U.S. Fed in recent years” and inflation remains above target. However, economists Nathan Janzen and Claire Fan said the central bank likely sees room for another 25-basis-point reduction amid “a weaker economy, and less upside risk to inflation,” though they warned that “further cuts to more stimulative levels would be increasingly difficult to justify.”
