BoC Deputy Governor Rhys Mendes said in a speech today that “We no longer need interest rates to be as restrictive as they were,” which justified the larger rate reduction of 50 bps at this month’s meeting.
Inflation data for October came in at 2%, matching expectations, while preferred core inflation measures edged up to approximately 2.5%. Mendes noteds that key upcoming data points, including third-quarter GDP and November employment figures, will play a critical role in shaping the BoC’s December rate decision.
“If the economy evolves broadly in line with our forecast,” Mendes stated, “then it’s reasonable to expect further cuts to our policy rate.”
However, he emphasized that the timing and pace of any additional easing will depend on incoming data and its implications for the inflation outlook.
