MNI BRIEF: Recession Means Two More BOC Cuts This Year-Beaudry

The Bank of Canada will lower interest rates twice more this year as tariffs and related uncertainty shrink output while inflation remains stable, former Deputy Governor Paul Beaudry said Monday.

“We’re calling for a slight technical recession in Canada,” Beaudry, now a UBC professor, said during a presentation for the Bennett Jones law firm. GDP will shrink at a 0.9% annualized pace in the second and third quarters before growth of 0.7% in the final three months of the year, he said. Canada's dollar can remain stable over the next few years as demand to hold CAD as a reserve currency offsets the negative gap between BOC and Fed borrowing rates, Beaudry said. (See: MNI INTERVIEW:BOC Still On Cut Path As GDP Falters- Ex Adviser)