The Bank of Canada hints that the interest rate cut cycle has ended, and the money market is pricing in no cuts before March next year.

Jin10 data reported on October 29, the Bank of Canada lowered its key overnight Intrerest Rate to 2.25% on Wednesday, the lowest level since July 2022, in line with market expectations, and suggested that this may mark the end of its rate-cutting cycle unless inflation and economic outlook change. Bank of Canada Governor Macklem stated that this easing policy aims to help the economy cope with the disruptions caused by U.S. tariffs while keeping inflation near the target of 2%. Meanwhile, the Bank of Canada revised its economic growth forecast for this year and next year down from 1.8% to 1.2% and 1.1%, respectively, citing the impact of U.S. trade policies. The Bank of Canada estimates inflation will be 2% in 2025 and about 2.1% in 2026. Macklem indicated that due to the continued unpredictability of U.S. trade policies, the range of possible outcomes remains wider than usual. Following the Bank of Canada's rate decision announcement, the Canadian dollar strengthened, with the money market pricing in that the Bank of Canada will not cut rates before March next year.