For the Bank of Canada, it's Ready, Set, Cut! With More Easing Ahead

Canada's central bank has its pedal to the metal on monetary easing. Its cut today was a jumbo 50 beeper, which should yank the benchmark prime rate to levels (5.95%) last seen two years ago.

The Bank's announcement reads like a doctor's note for a sick economy. The economy “continues to be in excess supply,” the “labour market remains soft,” and inflation is “now back around the 2% target." The BoC's basically writing a prescription for rate cuts while trying not to say the word "recession," like a politician avoiding the word "tax."
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Essentially, Governor Tiff Macklem's giving us all a permission slip to borrow money, noting that if all goes to plan, "we expect to reduce the policy rate further."

"...We are back to low inflation," he reassured in his press conference today. (Mind you, average core inflation is still 35 bps above target, but who are we to quibble?) "We want to see growth strengthen," he added, and typically what Macklem wants, Macklem gets.
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The economy is crawling

Growth prospects are dim this year. Capital Economics, for one, is predicting our economy will have as much excess capacity as a Weight Watchers meeting on New Year's Eve.

"The economy will remain in a position of excess supply well into 2025, which will continue to put downward pressure on inflation," the economics firm predicts. "Accordingly, it seems unlikely to us that the 50 bp cut today will be a one-off."

Economist David Rosenberg is singing a similar tune, warning not to pay too much heed to the fact that the Fed may cut slower. "The reality is that Canada is experiencing far less fiscal policy stimulus than is the case in the U.S., and the impact of the prior rate hikes is percolating with far more intensity seeing as in Canada, there is no such thing as a 30-year fixed-rate mortgage."
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Mortgage aftermath

Here are six ways today's rate nuke just changed mortgagors' lives: