The Globe and Mail has a great article by Heather Scofield about the recent slash to the interest rates... to 1958 levels. She writes...

"The Bank of Canada has joined the global campaign to prevent a broad recession from spiralling into an economic disaster, cutting interest rates to a 50-year low and dropping its focus on inflation.

After a series of smaller rate cuts this year that reflected the Bank of Canada's belief that the country was escaping the worst of the global slump and financial crisis, the central bank officially pronounced Canada to be at the beginning of a recession Tuesday. It aggressively slashed its benchmark rate by three quarters of a percentage point to 1.5 per cent, a level not seen in Canada since 1958 and the steepest cut since the aftermath of the Sept. 11, 2001, terrorist attacks.

That puts the bank's key rate three full percentage points lower than where it was a year ago, and actually below the core rate of inflation – meaning that it acts as a total disincentive to save.

While Canada's rates are not as low as in the United States, they are heading in the same direction. Canada joins many European countries, as well as Britain, Australia and New Zealand, in making super-sized cuts to rates to fend off the deepest recession in decades. And with more cuts likely to come, according to economists, Canada is on a path toward the lowest interest rates in its history, as the central bank attempts to nurse the country's economy back to health."

Read the full original article on the Globe and Mail.