The Bank of Canada is expected to make another interest rate cut in its final decision of the year, with expectations split between a 25 basis point or 50 basis point cut. This decision comes amidst ongoing weakness in economic growth, as the Canadian economy slowed to an annual growth rate of 1% in the third quarter compared to 2.2% in the second quarter.

Key forecasts:

1. A 25 basis point cut: Most economists, including TD Bank and BMO, favor a limited cut of this size, given the bank's previous caution regarding significant steps.

2. A 50 basis point cut: RBC and a number of analysts believe that the economic slowdown may push the bank to make a larger cut to support the market, especially after a similar cut in October.

Potential implications:

• Real estate market: The cut may relieve pressure on borrowers, but it will not lead to a swift recovery due to constraints related to the financial tests for fixed and variable rates.

• Inflation and spending: Any additional cut may boost consumption, but it could increase pressure to balance economic stimulus and curbing inflation.

• Outlook for 2025: There is optimism for further cuts in the coming year, prompting some buyers to wait until conditions improve.

Proposed title:

“Bank of Canada Faces Economic Slowdown: Is a Major Rate Cut the Solution?”

We will await the official bank announcement to confirm the forecasts and understand the future trends of monetary policy.