Analysts On CPI [1/3]

Desjardins and TD looking for a first cut in April.

• Desjardins: “The reacceleration in the core trimmed mean measure actually looks quite broad based, with the three-month annualized rates of core-goods, core-services excluding shelter and core-shelter prices all moving higher in December. The stickiness in these core measures of inflation comes as a disappointment to Canadians hoping to see enough progress today to open the door to rate cuts. […] Given the moderation seen in expectations for both growth and inflation according to yesterday’s consumer and business surveys […], we are sticking with our call that the central bank will begin lowering rates in April to keep the economy from falling into a deeper recession.”
• TD: “If you are looking for data to signal a rate cut is imminent, this isn't it. December's inflation report underscores that the last mile of getting inflation all the way back to 2% is the hardest. […] Despite December's report, we expect inflation, and the economy, will have cooled sufficiently by the spring for the BoC to make its first interest rate cut in April.” As Gov Macklem said last month, “the BoC doesn't need to see 2% to begin normalizing monetary policy, but rather be confident it is getting there.”