Local Analysts On BoC [1/2]

BMO and CIBC have differing reactions with the timing of their projected start of rate cuts.

• BMO: Today's move can be characterized as a moderately hawkish hike, in that the BoC is certainly not closing the door on the possibility of further moves. While we are not looking for further hikes this year, we are tweaking our rate call in light of the Bank's view on growth and inflation—we now see rate cuts beginning only in 2Q24, one quarter later than our prior view.
• CIBC: Underperformance of the BoC’s forecasts may not come soon enough to prevent another 25bp hike at the September meeting, which given the tone today now seems likely. These recent interest rate hikes may ultimately, however, prove to be more than is needed to bring inflation back down to target, and as a result we have pulled forward our expectation for the first rate cut in 2024 slightly to April, from June previously.