The Bank of Canada is likely to deliver more rate cuts, but it will not be slashing as aggressively as the US Federal Reserve Board, Bay Street economists say.

Following the release of today’s Monetary Policy Report Update, BMO Capital Markets says that the Bank looks set to trim interest rates again in the near-term, but it says that there’s little in the report to hint that they are poised to come close to matching the very aggressive cuts seen from the Fed.

BMO notes that the Bank has lowered its growth and inflation forecasts. But, it concludes, “The Bank appears to be in no real urgency to crank up the pace of rate cuts, although they clearly stand ready to do more.”

“Their inflation call certainly gives them room to get more aggressive if economic growth disappoints or financial conditions deteriorate further,” BMO adds, noting that the rate cuts could be done within the first half.

TD Bank economists say the update remains consistent with its’ view that the Bank of Canada will be cutting by an additional 75 basis points over the next two meetings. “Fortunately, unlike our neighbors to the south, Canada’s domestic demand platform is fundamentally sound, suggesting that the Bank will not be following the U.S. in terms of the magnitude of rate cuts,” TD says.

“We anticipated 75 basis points in rate cuts from the Bank of Canada over the next two meetings, bringing the overnight rate to 3.25%. In contrast, by the end of the Fed’s rate-cutting cycle – which we believe will be in March – the fed funds rate will likely come to rest at 2.75%,” TD adds.