BOC minutes: Members were divided on whether rates would need to be hiked again

  • Some members of governing council felt it more likely than not that overnight rate would need to rise further
  • Other members felt 5% would likely be enough to bring inflation to target
  • There was a strong consensus that with increasing evidence of falling inflation, BOC should be patient
  • Agreed to revisit need for rate hike at future decisions, after seeing more data
  • The lack of downward momentum in underlying inflation caused considerable concern, could mean more time needed or that policy not restrictive enough
  • Agreed overall inflationary risks had increased
  • Persistence in core, elevated expectations, wage growth and atypical corporate pricing behaviour indicate high inflation is becoming entrenched

These minutes have a hawkish bent to them but it’s unlikely to help CAD.

This article was written by Adam Button at Source