04:03 PM EDT, 10/07/2024 (MT Newswires) -- An ex-member of the Bank of Canada's governing body said officials should cut borrowing costs by half a percentage point later this month, Bloomberg News is reporting Monday.

There are "good reasons" to move interest rates "back to as close to neutral as quickly as possible," former Deputy Governor Paul Beaudry said, including boosting household and business optimism.

Now that policymakers are more sure that wage growth, expectations and corporate pricing are going in the right direction, Beaudry sees borrowing costs moving lower faster as the bank eyes a sustainable return to 2% inflation.

"The preconditions were there to kind of start moving down; you want to move that down quickly," Beaudry said in an interview on the Canadian Imperial Bank of Commerce podcast Curve Your Enthusiasm that aired Monday.

"I would really bet on 50 basis points," he said, referring to the bank's Oct. 23 meeting. Giving some monetary stimulus back amid the slowness in Canada's economy would also help in "getting that message across" to consumers and firms.

When you want to turn things around, you want to get the confidence going," he said.

Bloomberg noted the comments came amid a shift in interest rate expectations in North America after US employment data surprised to the upside on Friday. That prompted traders in overnight swaps to price in the BoC's benchmark overnight rate reaching near 3% by July of next year, and put the odds of a 50 basis point cut at the central bank's decision later this month at about 25%.

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