With another 50 basis points off U.S interest rates today, the U.S. Federal Reserve Board has cut 4% from rates this year to 2.5%, their lowest level since 1962.

“The Fed’s statement was not designed to provide new insight, but the bias toward further easing steps was left in place despite the very low level of current rates. That says it all,” notes BMO Nesbitt Burns.

BMO sees rates heading lower, noting that before the Fed next meets in early November, it will see a couple of ugly employment and NAPM reports which will reflect the extreme negative effects in the post-attack environment.

“The Fed will have little choice but to ease further in our view,” it says. “The Fed has historically moved the Fed funds rate visibly below the core inflation trend during recessions. That implies a 2% funds rate is well within normal historical parameters. To go into the 1% range, the Fed will likely want to see good inflation news in the months ahead. We believe that good inflation news will be forthcoming.”

TD Bank economists say that they believe that the Fed will at a minimum deliver a 25 basis point rate cut in November. “A pullback in consumer spending resulting from a sharp drop in consumer confidence, not to mention the disruption to domestic and international trade, are expected to nudge real GDP growth into negative territory in the third quarter. Moreover, economic conditions are likely to remain bleak in the coming months, before the stimulative effects of easier monetary policy start to kick in early next year and lift the U.S. economy from its current malaise.”

BMO suggests that the Bank of Canada is in a tough spot regarding the magnitude of its future cuts. “Already significantly behind the Fed in easing this year, if the Bank waits until the meeting and then also eases 50 basis points, the Fed is likely to trump that move almost immediately at its November meeting. The Bank will then have to bide its time until November 27.”