Interest Rate Outlook in Around Town
The Bank of Montreal (BMO) has revised its outlook for interest rates in response to the economic impact of proposed tariffs. BMO anticipates the Bank of Canada (BOC) will implement six consecutive quarter-point interest rate cuts, bringing the policy rate down to 1.5% by October.
The shift in expectations reflects concerns about the potential fallout from heightened trade tensions, which could increase costs for Canadian businesses and consumers. BMO’s forecast suggests that the BOC will adopt a more aggressive easing cycle to mitigate the risk of an economic slowdown.
The BMO also expects anticipated cuts to influence the Canadian dollar, potentially putting downward pressure on the currency. A more accommodative monetary policy may be necessary as the BOC navigates an uncertain global economic environment.
The next three Bank of Canada interest rate announcements will be March 12, April 16, and June 4.
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