Forecasters expect the Bank of Canada to speed up the pace of interest rate cuts and lower its policy rate by half a percentage point this week.
The central bank’s interest rate announcement on Wednesday comes after Statistics Canada reported the annual inflation rate in September tumbled to 1.6 percent — below the Bank of Canada’s two percent inflation target.
Nathan Janzen, an assistant chief economist at RBC, said the latest consumer price index report reinforced his expectation for a supersized rate cut.
“(You) have an economy that’s probably performing worse than necessary to get inflation under control and still interest rates (are) at restrictive territory. So that makes it a pretty straightforward argument to continue cutting interest rates,” Janzen said, adding that the central bank needs to lower interest rates to a level that doesn’t hinder economic growth….