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Laurentian Bank Sees Bank of Canada Cutting Rates to 2% by Year-End Amid Weak Growth

BY MT Newswires | ECONOMIC | 09/11/25 07:27 AM EDT

07:27 AM EDT, 09/11/2025 (MT Newswires) -- Laurentian Bank Securities said elevated global structural shocks have kept Canada's total and core consumer price index inflation high, complicating the Bank of Canada's policy decisions.

In late 2024 and early 2025, the bank projected the BoC's terminal rate would reach 3% by spring 2025, even as households and businesses curbed spending on uncertainty. The central bank instead lowered its overnight rate target to 2.75% and has held it there since mid-March.

Citing weak real gross domestic product growth and deteriorating labor market conditions in North America, Laurentian now expects the BoC to cut rates by 25 basis points at each of its September, October and December meetings, bringing the overnight rate to 2% by the end of 2025. That is near the lower end of the estimated neutral range of 2.25% to 3.25%.

The bank added that total easing could ultimately be as little as 50 basis points or exceed 100 basis points.

The BoC's next policy meeting is scheduled for next Wednesday.

MT Newswires does not provide investment advice. Unauthorized reproduction is strictly prohibited.

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