CIBC Economics predicts a 2.25% base interest rate will be achieved in the second quarter of 2025, and economist Avery Shenfeld says: “it would take a major turn of events to stand in the way of another 50 basis point reduction in December [2024], driven by the same logic as [this week’s] decision.”

Despite the anticipated rate cut, the central bank's overall stance is expected to lean towards the bearish side, particularly against the backdrop of declining inflation, further cooling of the labour market, and GDP running below the bank’s latest forecasts.

Canada's main stock index slipped on Wednesday due to falling commodity stocks, as investors evaluated a half-point interest rate cut by the Bank of Canada and anticipated further reductions in the future.

The Canadian Dollar (CAD) receded on Wednesday, backsliding another 0.2% against the US Dollar after the Bank of Canada (BoC) delivered a widely expected 50 bps rate cut. Rate traders are already pricing in a further double rate cut in December as the BoC grapples with Canada’s rapidly deflating economic landscape.

Canada's main stock index opened lower on Wednesday, hurt by mining stocks, ahead of the Bank of Canada's monetary policy decision that is widely expected to result in an oversized interest rate cut.

The half-percentage point interest rate cut marks the fourth consecutive reduction since June and brings the central bank’s policy interest rate down to 3.75%. With annual price growth now around 2%, governor Tiff Macklem said the Bank of Canada’s job has shifted from lowering inflation to maintaining it around the inflation target.

Futures tied to Canada's main stock index fell on Wednesday, hurt by crude prices, ahead of the Bank of Canada's monetary policy decision that is expected to result in an outsized interest rate cut. December futures on the S&P/TSX index were down 0.