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Bank of Canada will cut rates later this year

The Bank of Canada’s decision to hold interest rates at 0.50% and to remain neutral on the rate outlook was largely in response to the improvement in economic growth early this year, fiscal stimulus measures and the rebound in oil prices. We still think that it is overly optimistic about economic growth prospects, however, and expect an interest rate cut to 0.25%, from 0.50%, later this year.

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