08:57 AM EST, 01/09/2025 (MT Newswires) -- At its December meeting, the Bank of Canada (BoC) implemented a widely anticipated 50bps rate cut, noted UBS.

However, the meeting took a hawkish turn, given the lack of forward guidance for additional cuts and the shift to a

more data-dependent policy, wrote the bank in a note to clients.

Policymakers noted that they will evaluate the need for further reductions in the policy rate on a meeting-by-meeting basis, pointed out UBS. This marked a significant shift from market expectations, which had assumed that the December cut would be followed by smaller, more gradual reductions.

The decision to leave further cuts uncertain surprised markets with its hawkish undertone, added the bank.

UBS maintains its forecast of two additional rate cuts this year, broadly in line with market consensus, which should provide a boost to the Canadian economy.