CIBC Sees Another 25bps Bank of Canada Rate Cut in October After Wednesday's Reduction

10:04 AM EDT, 09/17/2025 (MT Newswires) -- The Bank of Canada resumed cutting rates on Wednesday, taking the overnight rate 25bps lower and into accommodative territory at 2.50%, as widely expected, said CIBC.

The move follows a cooling in underlying inflation pressures and a broadening deterioration in the labor market, along with ongoing trade uncertainty that is constraining investment, as cited in the BoCs statement, noted the bank.

With the unemployment rate elevated and retaliatory tariffs largely removed, inflation should remain contained ahead, and slow population growth will also weigh on household spending, pointed out CIBC.

The statement emphasized that policymakers are data dependent and are monitoring the effects of shifts in trade that will add to costs even as they weigh on economic activity, and they will also assess the degree of spillover into other areas of the economy and how inflation expectations evolve in judging if another cut is in the cards ahead, added the bank.

In CIBC's view, the economy is losing resilience and inflation will continue to be contained by the elevated unemployment rate and removal of retaliatory tariffs and, as such, the bank sees another 25bps cut in October.

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