Rates are down by 1/4 %
The Bank of Canada lowered it’s overnight rate by 1/4% this morning.
Given the pundits were asking for 1/2 % it is interesting to see that this is only a 1/4% cut, but this is how they explain it:
Three major interrelated developments are having a profound impact on the Canadian economy. First, the intensification of the global financial crisis has led to severe strains in financial markets. The associated need for the global banking sector to continue to reduce leverage will restrain growth for some time. Second, the global economy appears to be heading into a mild recession, led by a U.S. economy already in recession. Third, there have been sharp declines in many commodity prices. The outlook for growth and inflation in Canada is now more uncertain than usual.
Interesting to see now if the banks reflect this drop?
What do you think?
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