Summary: The Bank of Canada will likely cut interest rates in the second quarter of next year, according to an updated forecast from the Canadian Imperial Bank of Commerce.

Bank of Canada will likely join ‘rate-cutting party’ in 2020, CIBC says

The research note cites the recent addition of U.S. tariffs of Chinese goods and the Trump administration’s threat of escalating levies on imports from Mexico, which are set to take effect Monday, as reasons for the change in their forecast.

"That will filter into the Canadian economy. Eventually, I think the Bank of Canada is going to be forced to cut rates in 2020. I think that will be the next move in rates. It's unlikely to be a move higher," A bank of Canada official said.

Earlier this week, U.S. Fed Chair Jerome Powell signaled openness to a rate cuts if trade tensions persist. Meanwhile, the Bank of Canada struck an optimistic tone in its latest rate decision last month when it held rates steady at 1.75 per cent, citing factors such as a stabilizing national housing market, stronger consumer spending, employment gains, and recovery in the oil sector.