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The Bank of Canada<\/a> made it plain yesterday that this might be it for rate relief.<\/p>\n Canada\u2019s central bank cut its interest rate<\/a> by 25 basis points to 2.25 per cent, but its main takeaway was that if the economy behaves as forecast this rate is \u201cat about the right level.\u201d<\/p>\n The bank\u2019s argument is that there is a limit to how much monetary policy can support the economy through the \u201cstructural transition\u201d that Donald Trump\u2019s trade war<\/a> has brought about. Time for Ottawa to step in.<\/p>\n 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.<\/p>\n Despite that, some economists still believe the Bank of Canada will have to step back into the fray to support the economy.<\/p>\n Both Capital Economics and Bank of America think the central bank will cut another 50 basis points in 2026, bringing the end rate to 1.75 per cent.<\/p>\n Capital\u2019s forecasts for gross domestic product and inflation are lower<\/a> than the Bank of Canada\u2019s, suggesting more room for rate relief.<\/p>\n Stephen Brown, deputy chief North America economist, said Capital had expected these cuts to come in the first and second quarters, but after the bank\u2019s comments Wednesday, pushed them back to April and July.<\/p>\n \u201cOf course, getting the precise timing right is always tricky, but the key message is that we still think the Bank will be forced into more action eventually,\u201d said Brown.<\/p>\n Bank of America expects cuts of a quarter point each in March and April.<\/p>\n \u201cWe continue to believe the BoC will need to cut below their neutral range to support CAD growth against a tariff-led slowdown,\u201d said the team led by economist Carlos Capistran.<\/p>\n Not all economists share this view. Royal Bank of Canada<\/a> forecasts no further rate cuts as fiscal stimulus unveiled in next week\u2019s federal budget takes over \u201cthe heavy lifting\u201d in supporting the economy through the trade shock.<\/p>\n Oxford Economics also said \u201cthis will likely be the last rate cut of this cycle for the BoC,\u201d though it didn\u2019t rule out another small trim in the coming year if the economy and labour market weakens more than expected.<\/p>\n \u201cStill, we don\u2019t think it will cut rates deeply into stimulative territory well below 2 per cent, given elevated trade policy uncertainty, persistent upside risks to inflation from the trade war, and major new federal fiscal stimulus that will do most of the heavy lifting to support the economy,\u201d it said.<\/p>\n When questioned by reporters Wednesday on what would prompt the Bank of Canada to move off the sidelines, governor Tiff Macklem<\/a> said policy makers would need to see \u201can accumulation of evidence\u201d beyond monthly data.<\/p>\n But he left the door open in his opening remarks, stressing how uncertainty amid Trump\u2019s shifting trade policy remains the name of the game.<\/p>\n \u201cThe range of possible outcomes is wider than usual \u2014 we need to be humble about our forecast,\u201d Macklem said. \u201cIf the outlook changes, we are prepared to respond.\u201d<\/p>\n Governments around the world are awash in debt, and Canada is no exception. But just how severe is the problem and what will the consequences be? With the federal deficit in the spotlight ahead of the Nov. 4 budget, the Financial Post is exploring the state of sovereign debt in Canada and beyond in a weeklong series called Red Ink. From a primer on Canadian indebtedness to the consequences of a U.S. default, we\u2019ll explore some major questions about government debt and the looming deficit. <\/p>\n Check back here<\/a> every day for more from the series. <\/p>\n \u00a0Sign up here<\/a> to get Posthaste delivered straight to your inbox.<\/p>\n Is this chart the Bank of Canada\u2019s final word on this rate cycle?<\/p>\n As outlined above, economists have different views on the central bank\u2019s path forward.<\/p>\n The Bank of Canada has cut 2.75 percentage points off its interest rate since it peaked at 5 per cent in 2023. Its latest cut brings the rate to 2.25 per cent, lower but still a far cry from 0.25 per cent borrowers enjoyed during the pandemic.<\/p>\n G7 energy and environmental ministers meet in Toronto<\/p>\n MEG shareholders vote on takeover bid from Cenovus Energy<\/p>\n Economic Club of Canada hosts Canadian Pension CEO breakfast<\/p>\n Earnings: Restaurant Brands International, Parkland Corp., Fairfax Financial Holdings Ltd., Telus Corp., Power Corp. of Canada, Eldorado Gold Corp., AltaGas Ltd., Athabasca Oil Corp., Baytex Energy Corp.<\/p>\n Amid a tough job market and troubles affording homeownership, many young Canadians could be skipping retirement planning despite fears of not having enough in their senior years.<\/p>\n According to a survey by Canada Pension Plan\u2019s investment board about 66 per cent of respondents aged 28 to 44 said they were afraid of running out of money in retirement. Find out more<\/a><\/p>\n Are you worried about having enough for retirement? Do you need to adjust your portfolio? Are you starting out or making a change and wondering how to build wealth? Are you trying to make ends meet? Drop us a line at\u00a0wealth@postmedia.com<\/a>\u00a0with your contact info and the gist of your problem and we\u2019ll find some experts to help you out while writing a Family Finance story about it (we\u2019ll keep your name out of it, of course).<\/p>\n Want to learn more about mortgages? Mortgage strategist Robert McLister\u2019s Financial Post column <\/a>can help navigate the complex sector, from the latest trends to financing opportunities you won\u2019t want to miss. Plus check his mortgage rate page<\/a> for Canada\u2019s lowest national mortgage rates, updated daily.<\/p>\n Visit the Financial Post\u2019s YouTube channel<\/a> for interviews with Canada\u2019s leading experts in business, economics, housing, the energy sector and more.<\/p>\n Today\u2019s Posthaste was written by Pamela Heaven<\/a>\u00a0with additional reporting from Financial Post staff, Canadian Press and Bloomberg.<\/p>\n Have a story idea, pitch, embargoed report, or a suggestion for this newsletter? Email us at\u00a0posthaste@postmedia.com<\/a>.<\/p>\n Bookmark our website and support our journalism: Don\u2019t miss the business news you need to know \u2014 add\u00a0financialpost.com<\/a>\u00a0to your bookmarks and sign up for our newsletters here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"The Bank of Canada made it plain yesterday that this might be it for rate relief. Canada\u2019s central…\n","protected":false},"author":2,"featured_media":108835,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[3361,5490,138,275,78284,219,3508,111,139,69,78282,78283],"class_list":["post-108834","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-bank-of-america","tag-bank-of-canada","tag-business","tag-canada","tag-capital-economics","tag-economy","tag-interest-rates","tag-new-zealand","tag-newzealand","tag-nz","tag-rate-relief","tag-stephen-brown"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/108834","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=108834"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/108834\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/108835"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=108834"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=108834"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=108834"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}<\/a>
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