In a decision that’s surely to be debated by economists, the Bank of Canada today announced that it is lowering its target for the overnight rate by one-half of one percentage point to 3.5%.

The operating band for the overnight rate is correspondingly lowered, and the Bank Rate is now 3.75%.

“Overall, today’s move from the Bank of Canada suggests that although domestic demand in Canada remains incredibly healthy, they’re increasingly concerned about spillover effects from the slumping U.S. economy,” said TD Securities economics strategist, Jacqui Douglas. “Enough so to engineer their first 50bps rate cut in over six years.”

In its accompanying statement, the central bank said “there are clear signs that the U.S. economy is likely to experience a deeper and more prolonged slowdown than had been projected in January.”

“The deterioration in economic and financial conditions in the United States can be expected to have significant spillover effects on the global economy,” the bank said.

The cut marks new bank governor, Mark Carney’s, first major move since taking over last month. The bank said it believes the balance of risks around its January projection for inflation has shifted to the downside.

“Further monetary stimulus is likely to be required in the near term to keep aggregate supply and demand in balance and to achieve the 2% inflation target over the medium term,” it added.

Economists at the Royal Bank of Canada are expecting further action from the central bank. “The combination of slowing growth (mainly on the back of a heavy drag from the trade sector) and low inflation set up for the Bank to continue to cut the overnight rate and we are forecasting another 50 basis points of easing over the next couple of meetings,” wrote Dawn Desjardins, senior economist at RBC, in a note. “The risks favour even more aggressive rate cuts if the U.S. economic outlook continues to deteriorate.”

“All told, the downside risks to Canada’s outlook are growing,” she added.

The bank will publish a new projection for the economy and inflation, including risks to the projection, in the Monetary Policy Report on April 24.

The bank’s next scheduled date for announcing the overnight rate target is April 22.