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Bank of Canada less optimistic on economy

Despite a serious downgrade to its views on second quarter economic activity, the Bank of Canada opted to hold interest rates at 0.50% today and to remain neutral on the rate outlook, clinging to its hope that growth will rebound in the second half of the year. We still think this is overly optimistic, however, and expect an interest rate cut to 0.25%, from 0.50%, later this year.

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