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JPMorgan Switch To Faster BoC Cut Profile

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JPMorgan now see consecutive cuts through 1Q25

  • “The opening remarks by Governor Tiff Macklem leaned dovish by our reading on a few key dimensions that suggest a higher bar to pause the current easing cycle than before.”
  • “As a result, we now look for the BoC to cut at each of its remaining three meetings this year, bringing the policy rate down to 3.75% by end-2024. Additionally, we look for that pace to continue in 1Q25 and see one more cut during 2Q25, to bring the policy rate to 3.00% before holding it there throughout 2H25.”
  • “Relative to our forecast coming into the July meeting, we now see two more cuts this year but one fewer next year. On net, the 3% terminal rate we anticipate for this easing cycle is 25bp lower than previously.”
  • That's a change from after the June CPI report when they had expected a pause at yesterday's meeting before a next cut in September meeting and then "a gradual once-per-quarter pace of 25bp cuts for this year, accelerating to 25bp per meeting during 1H25, before the policy rate levels off at 3.25% in 2H25."
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JPMorgan now see consecutive cuts through 1Q25

  • “The opening remarks by Governor Tiff Macklem leaned dovish by our reading on a few key dimensions that suggest a higher bar to pause the current easing cycle than before.”
  • “As a result, we now look for the BoC to cut at each of its remaining three meetings this year, bringing the policy rate down to 3.75% by end-2024. Additionally, we look for that pace to continue in 1Q25 and see one more cut during 2Q25, to bring the policy rate to 3.00% before holding it there throughout 2H25.”
  • “Relative to our forecast coming into the July meeting, we now see two more cuts this year but one fewer next year. On net, the 3% terminal rate we anticipate for this easing cycle is 25bp lower than previously.”
  • That's a change from after the June CPI report when they had expected a pause at yesterday's meeting before a next cut in September meeting and then "a gradual once-per-quarter pace of 25bp cuts for this year, accelerating to 25bp per meeting during 1H25, before the policy rate levels off at 3.25% in 2H25."