BOC: Canada Bank Analysts Close To Abandoning Future Rate Cut Views Post-BOC

Canadian institutions have all but thrown in the towel on further BOC cuts after today's rate decision. Prior to the October meeting, BMO, Desjardins, and National each saw one further 25bp easing to a 2.00% terminal overnight rate - their post-meeting comments (below) suggest a reconsideration if not outright abandonment. Coming into the meeting, CIBC, RBC, Scotiabank, and TD each had no cuts beyond October as their base case and have retained that view.

• BMO doesn't quite abandon an expectation for further cuts but acknowledges "that’s likely it, for now, for Bank of Canada easing. The Bank appears to believe that the easing to date will offer support; inflation is steadily on its way back to 2%; and the usefulness of monetary policy is somewhat limited in this unique economic environment. That said, we believe that ongoing softness in the job market leaves the door open for some further support, and another 25 bp rate is still on the table for early-2026."
• National concurs: "To us, it’s reasonably likely that the Bank is now done as we share similar outlooks for growth and inflation. At the same time, we still judge economic risks as being skewed to the downside which warrants markets discounting some probability of further easing. Indeed, we wouldn’t close the door on a potential cut at one of the next couple meetings as incoming data—including a couple of jobs reports before December 10th —has the potential to change the outlook. At this point though, it seems a ‘hold’ is the more likely outcome. One naturally wonders how much next week’s federal budget led to the “hawkish cut”. Certainly, looser fiscal policy is supportive of growth and inflation over time, but we don’t expect marginal spending to immediately bring the Canadian economy out of its current malaise."
• Desjardins writes more conclusively: "The bar is high for further monetary policy support. ... We are now of the view that the Bank of Canada will keep interest rates on hold for the foreseeable future."