OTTAWA — An interest rate cut is widely expected Tuesday as the Bank of Canada tries to light a fire under the cooling economy.
The main question seems to be: will bank governor David Dodge use a match or a blowtorch?
Most economists are predicting rates will be lowered by a mere one-quarter of a percentage point, arguing the economy doesn’t need too much stimulus to warm up.
In fact, recent data has suggested the economy is fairly healthy, says Marc Levesque, senior economist with Toronto Dominion Bank.
Last month’s unemployment report showed about 30,000 jobs were created in March, better than analysts had expected.
And the latest statistics on economic growth, dating back to January, also surpassed forecasts.
“I don’t think they (the central bank) are going to see the need to be more aggressive,” than shaving a quarter point off rates, said Levesque.
