07:15 AM EDT, 10/24/2024 (MT Newswires) -- The Bank of Canada cut the Overnight rate by 50 bps to 3.75% on Wednesday, as was widely anticipated, noted David Doyle, head of economics at Macquarie.

BoC Governor Tiff Macklem indicated at the subsequent press conference that there was a "clear consensus" supporting the decision.

Macquarie's baseline BoC view changes near term as it now expects Canada's central bank to reduce by 50 bps in December versus a previous 25 bps estimate and to follow this with four successive cuts of 25 bps per meeting with the overnight rate reaching 2.25% in June 2025, stated Doyle.

Near-term risks to this remain skewed in a dovish direction with a 50 bps cut also possible at January's meeting, he added.

The statement struck a dovish chord in Macquarie's view with an emphasis placed on the soft labor market and favorable recent developments in both inflation and inflation expectations data.

Forward guidance for further cuts was kept in place, according to Doyle. Governor Macklem's opening statement echoed this and interestingly suggested the BoC now sees risks to the inflation target as "equally balanced" and indicated some concern that its pace could fall below target.