Five things to watch after the Bank of Canada's latest rate cut
The decision that practically gripped the nation came down this morning, as Bank of Canada Governor Stephen Poloz decided to cut interest rates once more. The first of his cuts came more abruptly when in January of this year, the BoC shaved 25 basis points off what was thought to be a stable 1 per cent; it was the first rate cut since April, 2009, and was a direct response to the steep drop in oil prices.
Wednesday's rate cut to 0.5 per cent was less of a surprise as the economy has not rebounded as the central bank expected. Now, not only did the BoC cut its rates, but it dramatically lowered its growth projections for the rest of the year.
Below are five things to watch out for after the interest rate cut.
How will the banks react?
The question now is whether the banks will follow suit and cut their own prime rates in response to the rate cut - and by how much. Toronto-Dominion Bank was the...