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CIBC Economics

Bank of Canada has cut interest rates by another 25 basis points, taking the overnight rate to 2.25%. But anyone who&#8217;s been hoping for further interest rate relief in the future may have been a little bit disappointed by some of the comments that accompanied that interest rate cut.
The Bank of Canada specifically stated that they now think rates are low enough to help facilitate the recovery in the Canadian economy, but also to keep inflation at 2%. Further interest rate cuts could still certainly happen next year, but we would probably need the economy to decelerate again for the Bank of Canada to do that.
For now, we forecast that the Bank of Canada has moved back to the sidelines, and that interest rates will stay at this current level throughout the remainder of this year and also throughout 2026 as well.

What should we make of the Bank of Canada lowering interest rates to 2.25%?

CIBC Economics

Andrew Grantham

Senior Economist

CIBC