Official: BoC to end quantitative tightening in 2025

Bank of Canada’s Deputy Governor Sharon Kozicki noted on Thursday that the BoC is set to end its quantitative easing program and that future applications of QE will have a very high bar to pass before accessing additional monetary policy mechanisms.

The Canadian Dollar pared back recent gains against the US Dollar on Thursday, shedding a quarter of a percent against the USD as market flows pull back to safety and bolster the Greenback. US economic data broadly printed worse than expected on Thursday, driving investors back into safe havens.

Canada brings strictly low-tier economic calendar events this week, leaving CAD flows at the mercy of broader market sentiment. However, Bank of Canada Governor Tiff Macklem is scheduled to speak at an event later on Thursday, and CAD traders will be looking for any updates on the Canadian central bank’s policy stance.

Key Quotes

Unwinding of quantitative easing through quantitative tightening has gone smoothly.

If inflation continues to ease, it is reasonable to expect further rate cuts. We are taking our interest rate decisions one meeting at a time.

The bar for us to use QE again is very high.

The BoC expects to end quantitative tightening at some point in 2025.