Published by Sherry Cooper
Will the Bank of Canada diverge from the US Fed on rate cuts?.
US ‘drives the bus’ on long-term interest rates – but BoC likely to push ahead with cuts, suggests economist
Decision makers at the Bank of Canada could be weighing up possible interest rate cuts in 2024 – but they’re sure to be keeping a close eye on developments south of the border as they consider a timeline for rates to come down.
Signs of a slowing economy, including easing core inflation and a gross domestic product (GDP) contraction in the third quarter, appear to suggest Canada’s central bank can now turn its attention away from possible further hikes and towards lower rates in the coming 12 months.
However, the US economy remains an important factor in the Bank’s decision-making process, according to Dominion Lending Centres chief economist Sherry Cooper (pictured top), particularly with the US “driving the bus” when it comes to long-term interest rates.