BoC Minutes: Governing council members agreed policy interest rate was on the stimulative side

• Agreed they would need to maintain optionality in setting monetary policy.
• Members felt threats to independence of Fed and other risks had made the world more turbulent and caused a resurgence in uncertainty.
• Uncertainty over the pace and scale of structural adjustment made growth, potential output, economic slack difficult to assess.
• Members see USMCA free trade deal review a downside risk to economic growth.
• Firms were reconfiguring supply chains, but structural adjustment will take time and could deepen sectoral supply-side impacts.

The BoC's minutes indicate a consensus among council members that current policy rates remain stimulative, suggesting a cautious stance on any immediate rate hikes. Their acknowledgment of external uncertainties, particularly regarding the Fed and trade agreements, hints at a more prolonged accommodative environment as they navigate structural adjustments and economic slack. This backdrop could influence CAD and broader market sentiment as traders weigh the implications against the backdrop of Fed policy.