Canadian Interest Rates To Plunge Further, Test Historic Extremes: BMO
Canada’s facing a trade war with its largest partner, and it may send interest rates plunging. BMO Capital Markets wrote to investors after the first round of tariffs were announced this weekend. The bank now expects rates to be slashed much more aggressively, trimming another point off the bottom for overnight rates. The plunge would test the historic extremes for rapid easing set nearly 30 years ago.
The Canada-US Trade War Is Set To Begin Next Week
Canada and the US kicked off its trade war this weekend. The US administration unveiled a 25% broad tariff on all goods from Canada, with a 10% tariff on energy being the only exception. It’s set to go into effect on Tuesday, with the country emphasizing it will adopt additional measures if Canada responds.
Canada’s response was smaller and more targeted. The country will hit them with a 25% tariff on $155 billion in US imports, with $30 billion in categories going into effect on the same date. The rest are set to go into effect 21 days later. Non-tariff measures such as removing US products from Crown-owned stores are expected to have an additional impact. ….[Continue Reading]