Will the Bank of Canada cut interest rates?

Markets have made a dramatic reassessment of the prospects for monetary, judging by the sharp decline in Overnight Index Swaps rates and Canada Government bond yields. In fact, these rates now suggest that markets expect the Bank of Canada to cut its policy interest rate this year or next. Barring further financial turmoil and a collapse in confidence, we still see the Bank of Canada holding its policy rate at 1% this year and into next.