Monthly Macro & Strategy | Under Pressure: Canada’s Rate Cuts and Economic Revival

The Bank of Canada became on June 5 the first G7 central bank to start its post-COVID rate cuts, in a move that was widely anticipated.

Highlights:

We expect a second rate cut on July 24, with a total of four cuts for the year and a steady pace of cuts towards the neutral rate looking ahead to 2025 and 2026.
As the monetary easing cycle starts, we expect a higher contribution from the fixed income portion to the portfolio's returns.
Our positioning remains relatively unchanged, with a slight reduction in the overweight equities and a decrease in the underweight fixed income.

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Your experts

Sébastien Mc Mahon, MA, PRM, CFA
Chief Strategist, Senior Economist and Vice-President, Asset Allocation & Portfolio Manager

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Alex Bellefleur, MA, CFA
Senior Vice-President, Head of Research, Asset Allocation

Tuyen Tran, M.Sc., CFA
Senior Analyst, Asset Allocation and Economics

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