As the outlook for global economic growth deteriorates markedly, there is a growing likelihood that more policy stimulus will eventually be required in Canada. With its key short-term rate at 1.0%, the Bank of Canada has a little more scope to provide conventional monetary stimulus, at least compared with the central banks in many other developed countries where rates are already at near-zero. Nevertheless, a maximum of probably 75 basis points of stimulus isn't much, particularly not in an environment where households already have a record high level of debt.
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