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Additional rate cut still seems like a good bet

The Bank of Canada’s decision to leave its key policy rate unchanged at 0.5% last week was largely as expected in light of the recent news that the real economy returned to growth in June. Nevertheless, we expect GDP growth to be pretty underwhelming in the second half of this year and, as a result, we still anticipate that the Bank will be forced to cut rates for a third time to only 0.25% soon.

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