- Prior overnight rate was 5.00%
- BOC sees "clearer signs that monetary policy is moderating spending and relieving price pressures"
- "There is growing evidence that past interest rate increases are dampening economic activity and relieving price pressures"
- BOC repeated that it " is prepared to increase the policy interest rate further if needed"
- Sees inflation returning to 2% at the end of 2025 vs "mid-2025" previously
- The global economy is slowing and growth is forecast to moderate further as past increases in policy rates and the recent surge in global bond yields weigh on demand
- Weaker demand and higher borrowing costs are weighing on business investment
- The surge in Canada’s population is easing labour market pressures in some sectors while adding to housing demand and consumption
- The labour market remains on the tight side and wage pressures persist
- a range of indicators suggest that supply and demand in the economy are now approaching balance
- The BOC projects global GDP growth of 2.9% this year, 2.3% in 2024 and 2.6% in 2025, little changed from previously
- Growth in the euro area has slowed further
New forecasts:
- Cuts 2023 growth forecast To 1.2% vs prior 1.8%
- 2024 to 0.9% vs 1.2% prior
- 2025 to 2.5% vs 2.4% prior
- 2023 inflation to 3.9% vs 3.7%
- 2024 inflation to 3.0% vs 2.5% prior
- 2025 inflation to 2.2% vs 2.1% prior
USD/CAD was trading at 1.3772 just ahead of the decision and rose to 1.3793 afterwards. The overt hawkish bias is still there but all the commentary points to a slowing economy.
Macklem and Rogers will hold a press conference at 11 am ET