(Bloomberg) — Economists see a clear road map for the Bank of Canada now that inflation is close to normal levels — a sequence of quarter-point rate cuts stretching well into next year.
The central bank is unlikely to opt for outsized cuts as it lowers borrowing costs, according to a new Bloomberg survey. In fact, none of the 18 analysts who responded to the poll believe the bank will reduce the policy rate by 50 basis points or more at any meeting.
Rather, a majority of economists see five cuts of 25 basis points at the next five meetings — including at next Wednesday’s decision — until the benchmark overnight rate is at 3.25%, before a pause in April. Officials led by Governor Tiff Macklem have already cut twice to lower the policy rate from its 5% peak.
The survey suggests forecasters are optimistic about a gradual normalization of monetary policy, consistent with a soft landing for Canada’s economy.
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