BoC Minutes: Governing Council agreed to keep options open
- Members acknowledged they would need to rely on judgment more heavily than usual.
- Agreed, they would need to take a risk management approach to monetary policy.
- Agreed, they could therefore take some time to see how the war in Iran evolved and what it meant for the outlook.
- Felt they had some flexibility, given inflation was close to target and core measures suggested limited pressures.
- Felt that in the near term, risks to growth looked tilted to the downside, while the oil price shock represented additional upside risk to inflation.
- Felt higher gasoline prices, combined with still-elevated inflation essentials, could push up inflation expectations.
- Acknowledged public perception of inflation remained high after the 2022 spike, and thar gasoline prices have a large impact on households’ assessment of inflation.
Context
The BoC's minutes convey a cautious yet flexible monetary policy stance, indicating that while inflation is near target, current geopolitical tensions and oil price fluctuations warrant careful judgment. This suggests the council may opt for a more data-dependent approach moving forward, reflecting concerns over growth risks and inflation expectations—important factors for traders to monitor in guiding CAD and fixed income positions.
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