BMO Capital Markets has made a downward revision to its US economic growth forecast for this year, lowering it from 2.4% to 2.2%. This adjustment is expected to provide further impetus to the Bank of Canada to cut interest rates come June 5.
Notably, this move marks the first time in quite a while that BMO has downgraded its prediction for US economic growth, as pointed out by Chief Economist Doug Porter. He added that the period of upward surprise in the US seems to be nearing an end, and this cooling off might lead the Federal Reserve to reduce interest rates in the second half of 2024.
Porter argued that the slowing down of the US economy could allay the Bank of Canada's anxiety about policy differences with the Federal Reserve and the potential weakening of the Canadian dollar.
