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The BoC Met Our Expectations — And Where its Narrative Could Go Wrong
The Bank of Canada met our expectations in today’s announcements. The statement is here and see the statement comparison in the appendix. The MPR including updated forecasts is here. Governor Macklem’s opening remarks are here. They cut the policy rate by another 25bps to 4.5% from a 5% peak. They also left balance sheet plans unchanged and signalled no nearer-term appetite for changing them. Guidance continues to leave open the prospect of further rate reductions this year in keeping with our unchanged forecast for another 50bps of cuts in the next two meetings. The broad tone of the communications was dovish, ... (full story)