The Bank of Canada’s larger-than-normal interest rate cut last month has a lot of market watchers looking for more of the same. Most of the well-known economists are forecasting another 50 basis point cut at the setting in December.
That would drop the central bank’s trend setting Policy Rate to 3.25%, which many analysts see as the high end of the so-called neutral range for the rate.
Neutral rates are deemed to neither discourage nor encourage economic growth. Right now, that range is commonly considered to run between 2.25% and 3.25%.
There are, however, some analysts who see the BoC dropping its Policy Rate to 2.0%, or less, by the middle of next year. They see some lingering, troubling signals coming from the economy: