Rosenberg Says BoC Not Done Cutting Despite Tiff Macklem's View

09:44 AM EST, 11/25/2025 (MT Newswires) -- Governor Tiff Macklem would like to believe the Bank of Canada is done easing, but Rosenberg Research said it definitely isn't convinced.

Rosenberg Research noted that the BoC thought it was done last winter and pinned the policy rate at 2.75% from March right through to August -- having taken it down a cumulative 50 basis points since the tail-end of summer to 2.25%.

The Canadian economy already has a recession feel to it, and that came out big time with the contraction in retail sales volumes in September and a repeat negative performance on track for October. The odds of back-to-back gross domestic product declines are "uncomfortably high" -- Q3 data will come out on Friday, stated Rosenberg.

Only during the 2015 energy-sector meltdown did this condition fail to coincide with an official recession, it pointed out.

What last Friday's retail sales report also revealed is the extent to which the BoC is pushing against the proverbial string, added Rosenberg. The areas that its policy influences the most, keeping in mind that Canada has already seen 275 basis points of rate relief from the peak, saw a huge 2.4% spending retreat in September, and have been down in two of the past three months.

Over the six months to September, the most interest-sensitive sectors of the Canadian retail sales pie have contracted at a 4.2% annual rate.

That should be a wake-up call for the hawks on the Governing Council because chartered banks are tightening their credit guidelines in response to double-digit growth in both personal delinquencies and insolvencies, according to Rosenberg.

The other piece of data Rosenberg received on Friday was the New Housing Price Index (NHPI), which fell for the seventh consecutive month in October, down 0.4% month over month and 1.8% year over year.

Meanwhile, the "owned accommodation" segment of the consumer price index is running at a 2.0% inflation rate. Switch those numbers around and the headline inflation rate would be 1.5%, calculated Rosenberg.

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