Will The Bank Of Canada Deliver Another 175 Bps In Rate Cuts? Td And Cibc Say Yes

Canadian Mortgage Trends ~ July 26th, 2024

Borrowers may have welcomed recent rate cuts from the Bank of Canada, but TD Bank and CIBC predict an additional 175 bps cut by the end of 2025, lowering the overnight rate to 2.75%.

The recent half-percentage point worth of rate cuts delivered by the Bank of Canada over the past two months may have provided some relief for select borrowers, but forecast suggest there’s much more to come.

Just how much depends on which forecast you follow. Among the current Big 5 banks’ predictions, borrowers are undoubtedly hoping that those by TD Bank and CIBC come to fruition, with both predicting that the Bank of Canada will cut rates by another 175 bps by the end of 2025.

That would bring the overnight target rate back down to 2.75%, comfortably within the Bank of Canada’s neutral range of between 2.25% and 3.25%, and a level not seen since early 2022.

This ambitious prediction stands out when compared to forecasts from other major banks.

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