BMO Capital Markets Anticipates The Bank Of Canada Will Begin Cutting Interest Rates In Q2 Of 2024 And Will Lower Its Policy Rate By A Full Percentage Point By This Time Next Year, To 4%
Portfolio Pulse from Benzinga Newsdesk
BMO Capital Markets has revised its forecast for the Bank of Canada, now expecting interest rate cuts to begin in Q2 of 2024. The policy rate is projected to decrease by a full percentage point to 4% by this time next year. This outlook is less aggressive than market expectations, with rate cuts anticipated once inflation reaches the mid-2% range, expected in the spring.
December 18, 2023 | 7:17 pm
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The iShares MSCI Canada ETF (EWC), which tracks Canadian equities, may be indirectly affected by BMO's forecast of the Bank of Canada's rate cuts starting in Q2 2024, as interest rate changes can influence economic growth and equity markets.
While the news directly pertains to the Bank of Canada's interest rate policy, it indirectly affects EWC as the ETF comprises Canadian equities that can be sensitive to changes in interest rates. The impact is considered neutral in the short term as the rate cuts are anticipated in the future, and the exact effects on the ETF will depend on various factors including actual economic conditions and inflation at the time of the rate cuts.
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