BOC: Analysts Continue To Look For 2 to 3 More Cuts (1/2)

Some sell-side institutions' takes on the March BOC decision (from MNI's review of the meeting out yesterday, PDF here) are below - we didn't see any view changes following Wednesday's meeting in terms of the terminal rate. Most continue to eye the BOC moving to 2.25% - 2 more cuts, by around mid-year - with a few outlying calls split between 2.00% and 2.50%. In alphabetical order of institution:

• BMO: Weaker Growth To Trump Upside Inflationary Impact: “future decisions will be largely guided by the direction of travel in the trade war, although we suspect the Bank was headed a bit lower in any event. We continue to expect three more 25 bp cuts at the next three meetings, taking the overnight rate down to 2%. Clearly, that's dependent on how tariffs evolve, while the eventual fiscal response could have an impact as well. Our core assumption is that Canada will be facing some serious tariffs for an extended period of time and that the growth dampening aspects of the trade war will ultimately outweigh the upside inflationary impact, keeping the Bank in easing mode.”
• CIBC: A Band-Aid For A Wound Of Unknown Size: “We're sticking with our existing forecast for a further 25 basis point cut at each of the next two rate decisions. The resulting 2.25% overnight rate could end up being the trough for this cycle if, by summer, Canada and the US are able to hammer out a deal that largely removes tariffs on both sides. That's still our base case forecast at this point. But a longer and more protracted trade war would entail a major recession, with the extent of further rate cuts being dependant on how strongly fiscal policy steps in to support growth, and on evidence showing that the initial upswing in prices is starting to be offset by downward pressure on inflation from greater economic slack.”
• Desjardins: Another Rate Cut in April Isn’t Guaranteed: “The market reaction following the announcement suggests investors are acknowledging that a follow-up rate cut in April is no slam dunk…Our forecast has embedded a more gradual rate cut profile than would be expected absent the upward pressures on inflation, but clearly the BoC will want to assess the early evidence, both on growth and inflation, before offering more accommodation. Key to watch for market participants will be the Bank’s next business and consumer surveys, out on April 7, which should provide another update on how hiring, investment and inflation expectations are evolving.”
• Goldman Sachs: Economy Characterization Dovish: "We regard the characterization of the economy as dovish, the policy statement as slightly hawkish, and the press conference more balanced, with the mixed set of signals likely reflecting the BoC’s reluctance to pre-commit to a policy path given the high uncertainty around US trade policy and Canadian fiscal response. We maintain our forecast for 25bp per meeting cuts to a 2.25% terminal rate in June."