Bank of Canada staying cautious but considering more rate hikes: summary
The Bank of Canada’s governing council thinks it might need to raise interest rates further but it's proceeding carefully, according to a summary from its last meeting.
OTTAWA — The Bank of Canada's governing council deliberated on the need for additional interest rate hikes, maintaining a cautious approach following its initial rate increase since 2023. The council noted significant uncertainty in various factors, including the Middle East conflict, U.S.-Canada trade relations, global financial conditions, and the pace of transmitted cost increases to consumers.
In response to the eighth month of the Middle East conflict and the lack of resolution, council members discussed the possibility of raising rates further to curb the risk of energy cost-driven inflation spreading across the economy. While acknowledging that monetary policy could not directly lower global energy prices, the council recognized its role in preventing such inflation from becoming widespread.
The central bank increased its outlook for annual inflation to reach 3.5% by year-end, with the expectation of maintaining inflation above 3% for most of 2027. The bank's surveys suggested that some businesses anticipate price increases over the next year, although most costs have not yet been passed through to consumers. The Bank of Canada's subsequent interest rate decision is scheduled for December 9.
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- Bank of Canada moving carefully, but further hikes might be needed: meeting summary toronto.citynews.ca
- Bank of Canada moving carefully, but further hikes might be needed: meeting summary winnipegfreepress.com
