nk of Canada may pause briefly, but the bias is still toward more easing rather than renewed hikes.
Why should I care?
For markets: Bond markets may be pricing the policy path too high.
Rosenberg’s view is that if growth and lending keep slowing, investors will gradually mark down expected policy rates – which usually helps shorter-dated bonds most. It says the 2-year Government of Canada yield should be nearer 2.0% than about 2.5%, suggesting the front end is still baking in stickier rates than the data justify. That part of the curve can reprice quickly if a “pause” turns into another round of cuts.
Zooming out: One inflation bump can hide a broader slowdown.
Year-over-year CPI can look jumpy when the comparison period included one-off policy changes, like a tax holiday. When growth and hiring momentum are fading, central banks tend to watch underlying inflation and credit conditions more than any single headline print. Canada’s recent cooling backdrop suggests the bigger risk is demand weakening further, not prices reaccelerating.