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Emanuella Enenajor, North America economist for Bank of America Merrill Lynch, said forward guidance would be the natural choice for the bank if further rate cuts aren’t enough to bring growth back to baseline.

“In that scenario I think they would engage in forward guidance, as a way to impact rates a bit further out the curve,” she said. “I think QE is an option if all of those other methods don’t succeed and we still see weak economic growth, and that is something the Bank of Canada could engage in further down the road.”

Douglas Porter, chief economist at BMO Capital Markets, said that while being forced to deploy QE can’t be ruled out, the bar is high for that sort of policy tool to be used in Canada.

“I think there are a number of steps that would happen between here and QE,” he said. “One thing to keep in mind is the bank didn’t even embark on QE during the worst of the financial crisis and during the early stages of the recovery, when the unemployment rate was quite a bit higher and the economy was much, much weaker.”

In that scenario I think they would engage in forward guidance, as a way to impact rates a bit further out the curve

Porter agrees that forward guidance would probably be the next step if rate cuts fail to work, though his forecast predicts the bank is done cutting rates and will start hiking by the second half of next year.

“In the event we do see a material weakening of the global economy, there are other steps they could take before going directly to QE,” he said. “They could talk down the Canadian dollar, they could give very explicit forward guidance, they could even do credit easing before they chose QE. So I think QE would be about step five.”