The Bank of Canada’s governing council released the minutes from its latest policy meeting, revealing a diversity of views among policymakers regarding the timing of interest rate cuts. However, the deliberations emphasize a consensus on the overall pace of monetary policy easing.
In the meeting held on April 10, the council acknowledged recent progress in taming inflation, noting that the annual inflation rate had cooled to 2.8 percent in March. They also observed signs of easing in core inflation metrics. Despite these positive developments, the policymakers concurred that inflation remained too high and required further attention from elevated interest rates.
Policymakers raised concerns about persistent shelter inflation linked to rising rents, highlighting it as a significant headwind for price stability. The deliberations reveal that while there were varying perspectives on the timing of the first rate cut, the council agreed that any easing would likely be gradual. They emphasized the need to balance risks to the economic outlook with the slow path of returning inflation to the target of 2 percent.
Bank of Canada Governor Tiff Macklem had previously indicated that a first rate cut in June was within the realm of possibilities. The latest meeting minutes reiterate that the governing council will continue to monitor economic data and assess the appropriate timing for adjusting monetary policy.
