iAtoday

Several indicators suggest that a downward rate cycle might soon be underway.

This is what Sébastien Mc Mahon, Chief Strategist and Senior Economist at iA Financial Group, observes in his latest monthly commentary: Winter is leaving, rate cuts are coming.

A favourable environment

Despite the Bank of Canada’s announcement at the beginning of March that it would maintain its key rate at 5.00%, a number of signs point to an easing of the country’s monetary policy in the near future.

Sébastien Mc Mahon notes a certain lull in the economy, for example, with inflation for a wide range of goods and services slowing and food prices stabilizing.

A delicate balance

However, headwinds could still be on the horizon as rental and real estate markets continue to struggle with high inflation, fuelled in particular by significant population growth.

This creates a delicate situation for the central bank’s monetary policy, says Sébastien Mc Mahon, who nonetheless expects to see a number of rate cuts before the year’s end. 

In Sébastien Mc Mahon’s full analysis, you’ll also learn more about:

• iA Financial Group’s forecast for the timing of the first rate cuts
• the variables impacting the timing of downgrades
• the number of anticipated cuts
• the impact of the current situation on the outlook for stock market returns

Read now: Winter is leaving, rate cuts are coming.