It’s pretty much done – all we’re waiting for is the paperwork.
That’s the situation most economists in this country see when it comes to Wednesday’s Bank of Canada decision on its benchmark rate. They expect the central bank will cut the rate by half a point.
There is downward pressure on interest rates in most parts of the world these days but Canada is moving faster and more aggressively than other nations because our economy is, in the words of RBC’s economics unit, underperforming.
That’s polite language for heading south. If it weren’t for government spending, we’d be in recession right now as the private sector is flat and consumers are trimming their spending in order to cover rising mortgage and rent costs.
To put it another way, interest rates went up to fight inflation but now are being slashed as a tool to stimulate the economy. And the pace of those reductions is on the rise. First, we had three cuts of a quarter point each. Now they will be bigger as the central bank tries to stave off an economic contraction.
