Scotiabank pushes back its Bank of Canada rate cut forecast
Scotiabank now sees the Bank of Canada lowering its benchmark interest rate at the beginning of 2020 instead of at the central bank’s next meeting.
The change of forecast comes on the heels of comments Thursday by Governor Stephen Poloz, which sent the Canadian dollar higher against its U.S. counterpart and tempered market expectations for a reduction in borrowing costs at the central bank’s Dec. 4 rate decision.
“We think we’ve got monetary conditions about right given the situation,” Poloz said during on onstage interview at the Ontario Securities Commission in Toronto.
That remark, and others, by the central banker prompted the Bank of Nova Scotia to reassess its outlook. “Governor Poloz used language today that — barring a large shock — sets a high bar for easing in about two weeks’ time,” economist Derek Holt said in a note to clients sent after markets closed.
Scotia joins the majority of economists polled in a Bloomberg survey this month who anticipate the central bank will begin following global peers including the U.S. Federal Reserve in lowering its benchmark rate in the first quarter of 2020. The Bank of Canada’s overnight rate has stood at 1.75 per cent for eight straight meetings.
Source: Financial Post
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