September 18, 2024 at 06:31PM
Some Governing Council members were more concerned about downside risks to inflation
Concern about downside risks was linked to potential further weakening of economy and labor market
Other members took the view that risks to inflation outlook were balanced
Members discussed whether weakness in Canadian consumption and housing could partly be due to caution on the part of households
Members felt consumers could be waiting for lower rates to make large purchases or enter the housing market
Discussed scenario where economy could weaken and it might be appropriate to speed the pace of cuts
Labor market softening, wage growth still elevated
Housing market subdued
No pre-determined path for rates, decisions to be made meeting-by-meeting
Council puzzled by successive upside surprises in US household spending
Felt low US saving rate was a possible indicator of weakness going forward
In China, continued weakness in domestic demand had increased the downside risk to the growth outlook
The Bank of Canada cut rates by 25 bps at the meeting
Macklem signalled a willingness to cut more-quickly after the decision
BOC deputy Nicolas Vincent speaks tomorrow
The comments on the US economy are more interesting than the ones on the Canadian outlook. I wonder if Macklem got the idea about the low savings rate from his trip to Jackson Hole.
This article was written by Adam Button at www.forexlive.com.