Bank of Canada cuts rates

The Bank of Canada has implemented a second consecutive interest rate cut, lowering the benchmark rate to 4.5% as the economy shows signs of slowing and inflation eases. Governor Tiff Macklem highlighted concerns over rising unemployment and soft household spending, signaling a shift in focus from controlling inflation to supporting economic growth. Economists are now forecasting additional rate cuts in September and October, with some suggesting urgency in continuing the cutting cycle due to emerging recession risks. Despite the Canadian dollar's slight decline following the announcement, it has been stable overall, and predictions indicate it will maintain current levels as both Canadian and U.S. rates are expected to decrease further. Major Canadian banks have adjusted their prime lending rates in line with the central bank's decision, reflecting the anticipated changes in borrowing costs. The next interest rate decision from the Bank of Canada is scheduled for September 4.