![\"\"](\"https:\/\/www.livabl.com\/articles\/wp-content\/uploads\/2019\/10\/bank-of-canada-compressed.jpg\")
<\/a><\/p>\nPhoto: James Bombales<\/em><\/p>\n Market experts had been widely anticipating Canada\u2019s central bank to cut its mortgage-market influencing overnight rate at some point in the first half of 2020. <\/p>\n Now, with mounting fears over an uncontainable coronavirus outbreak rattling Canada\u2019s economy and sending global markets spiraling, economists from Oxford Economics believe the Bank of Canada will move swiftly to cut its overnight rate twice in the next two months. <\/p>\n\n \u201cWe expect the Bank of Canada will reduce its policy rate a quarter point at next week\u2019s meeting and again in April. We had already been anticipating lower rates, but think they are even more likely now as mounting \u201ctransitory\u201d headwinds, led by the COVID-19 outbreak, hit an already vulnerable economy,\u201d wrote Oxford Economics\u2019 Tony Stillo and Michael Davenport in a research briefing published today.<\/p>\n Stillo and Davenport noted that Canada\u2019s economic performance had slowed to a crawl by the end of 2019, before any concerns over the coronavirus outbreak materialized. The substantial increase in economic uncertainty since then is likely the catalyst the central bank is looking for in the direction of taking action now, rather than waiting until the spring or beyond.<\/p>\n While the economists acknowledged that there are legitimate concerns over a rate cut overheating Canada\u2019s housing market and encouraging household debt growth, the pros vastly outweigh the cons in the current climate of global economic panic.<\/p>\n Stillo and Davenport described a Bank of Canada rate cut as \u201cinsurance against [a] sharper slowdown if the coronavirus outbreak escalates to [a] global pandemic.\u201d<\/p>\n Not all economists are as convinced that a rate cut is a certainty next week. Capital Economics\u2019 Stephen Brown noted that with cases in Canada totaling only 14 (as of the time of writing on February 28th), the Bank of Canada may hold off until later in the year, fearing a rate cut now could heat up the housing market to a dangerous point.<\/p>\n \u201cWe think the Bank would only cut if it were convinced that the disruption caused by the virus elsewhere in the world has already been enough to seriously jeopardise domestic growth,\u201d he wrote in a note published Friday. <\/p>\n In the bank\u2019s weekly market news digest, TD economist Ksenia Bushmeneva wrote that the probability of a rate cut has increased substantially over the last couple weeks, but it remains unlikely as the Bank of Canada exercises caution and waits to develop and clearer understanding of how severe the economic disruption caused by the coronavirus will be.<\/p>\n \u201cInstead, given the list of risks facing the Canadian economy, we expect [Bank of Canada] Governor Poloz to use this opportunity to open the door even wider to monetary easing later this Spring,\u201d she wrote.<\/p>\n With mounting fears over an uncontainable coronavirus outbreak rattling Canada\u2019s economy and sending global markets spiraling, economists from Oxford Economics believe the Bank of Canada will move swiftly to cut its overnight rate twice in the next two months. <\/p>\n","protected":false},"author":5,"featured_media":200578,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"content-type":"","apple_news_api_created_at":"2020-02-28T21:47:13Z","apple_news_api_id":"c650cf73-4854-48e4-a92f-7cf644f15772","apple_news_api_modified_at":"2020-02-28T21:47:13Z","apple_news_api_revision":"AAAAAAAAAAD\/\/\/\/\/\/\/\/\/\/w==","apple_news_api_share_url":"https:\/\/apple.news\/AxlDPc0hUSOSpL3z2RPFXcg","apple_news_coverimage":0,"apple_news_coverimage_caption":"","apple_news_is_hidden":false,"apple_news_is_paid":false,"apple_news_is_preview":false,"apple_news_is_sponsored":false,"apple_news_maturity_rating":"","apple_news_metadata":"\"\"","apple_news_pullquote":"","apple_news_pullquote_position":"middle","apple_news_slug":"","apple_news_sections":["https:\/\/u48r14.digitalhub.com\/sections\/09b86915-7d2b-3acd-915b-b215002d01b7"],"apple_news_suppress_video_url":false,"apple_news_use_image_component":false,"footnotes":""},"categories":[11269],"tags":[],"coauthors":[8652],"apple_news_notices":[],"yoast_head":"\n