Experts at the Bank of Canada predicted in a research note issued yesterday, Friday, that the Bank of Canada will lower interest rates by about 25 basis points during the September and October meetings, although markets will continue to monitor the Canadian Consumer Price Index data scheduled for release next week.

Moreover, economists at the Royal Bank of Canada indicated that there is a very slim chance for the Canadian interest rate to be reduced by 50 basis points at one of these meetings, and that Canadian inflation data may hinder the Bank of Canada from making such a decision.

The economists at the Canadian bank noted that there were concerns that interest rate cuts from the Bank of Canada could reignite rapid growth in housing prices, however, the response in housing markets to the 25 basis points cut in June and July was weak, and with signs of a slowdown in rental price growth, the Bank of Canada will continue on the path of lowering interest rates.