Bank of Canada Cuts Aggressively, But Turns More Cautious, Boosting Loonie
The Bank of Canada cut its benchmark overnight rate by an outsized 50 basis points this morning – a step that broadly matched market expectations – but also telegraphed a more gradual approach in months to come, generating a modest advance in the loonie. In the official statement setting out the decision, policymakers said “With inflation around 2 percent, the economy in excess supply, and recent indicators tilted towards softer growth than projected,” making it reasonable to “reduce the policy rate by a further 50 basis points to support growth and keep inflation close to the middle of the 1-3...