09:24 AM EDT, 09/18/2024 (MT Newswires) -- Bank of Canada Senior Deputy Governor Carolyn Rogers said late Tuesday that "there's still a bit of work to do" on inflation and "We want to see a sustainable return to 2% inflation. So that's still to come," noted Scotiabank.

Rogers remarked that Canada's central bank wishes to see further progress in bringing core inflation lower. Scotiabank thinks she's right to have that stance.

Overall, these didn't sound like comments that are teeing up upsizing rate cuts any time soon, stated the bank. Investors will also get the Summary of Deliberations on the path to the Sept. 4 policy decision at 1:30 p.m. ET on Wednesday, though it will likely garner little attention just ahead of the United States Federal Reserve decision.

BoC Governor Tiff Macklem speaks on Friday and may offer further remarks, although his topic is "The Impact of AI on productivity, on labour markets and price-setting behaviour" at an NBER event in Toronto on Artificial Intelligence's effects, pointed out the bank.

In Canada, key is the five-year real bond yield that has plunged by over 100bps over the past year, added Scotiabank. This matters to the mortgage and housing markets such that the market's easing needs to be considered alongside the policy rate. Plus, Canada's extension of mortgage amortization to 30 years from 25 has a rate equivalence of about -90bps for borrowers. Regulatory and monetary easing are likely to be joined by even faster fiscal stimulus into an election year which should make forecasters nervous about the kind of pressure that some shops are applying to the BoC to shift to emergency mode via rapid rate cuts.

With the information Scotiabank has to date, it finds that would be just plain "irresponsible."