- Reviewed a broad range of indicators and greed they continued to point to underlying inflation of around 2.5%
- Agreed that uncertainty around renegotiation of the USMCA was coming into focus
- Impending USMCA renegotiation was likely to impeded a recovery in business investment in the near term
- Consumption growth, both in aggregate and per person, was robust and broad-based
- Agreed consumption should continue to support growth going forward and economy was expected to grow modestly, in line with current tariff scenario outlined in July
- Overall, members agreed that the labour market had softened
- BOC members expect to present baseline projections in October
- It was difficult to asses the amount of slack in the economy and the outlook for inflation was uncertain
- Full summary here
The baseline scenario is notable because in July, the BOC outlined several scenarios rather than the usual baseline because of tariffs.
Quotable:
Governing Council members then three primary developments since the July decision that supported cutting the policy interest rate. First, the economy had weakened, with further softening in the labour market. Second, there was more evidence from recent monthly inflation readings that the upward pressures on core inflation may be easing. Third, the removal of most retaliatory tariffs by Canada also meant there was less upside risk to future inflation.
Market pricing suggests the October meeting is 55% for a cut.
This article was written by Adam Button at investinglive.com.
