The summary details the discussions between governor Tiff Macklem and his deputies in the lead-up to the June 5 rate announcement at which the central bank lowered its key rate.
“While they recognized the risk that progress could stall—as it had in the United States—there was consensus that with four consecutive months of easing in core inflation and indicators suggesting continued downward momentum, there had been sufficient progress to warrant a first cut in the policy rate,” the summary says.
The Bank of Canada’s quarter-point rate cut was the first time the central bank lowered its policy rate since March 2020. It also marked a turning point in its fight against high inflation.
What did experts predict?
Ahead of the rate decision, most forecasters were expecting the central bank would deliver its first cut, though some were holding out for July.
Canada’s inflation rate reached 2.7% in April, while measures of underlying price pressures eased as well.
With its key rate now standing at 4.75%, the summary reiterates the central bank’s cautious approach, noting that it plans to take future interest rate decisions one at a time.
While one interest rate cut isn’t expected to have a major affect on the economy, it signals the start of an easing cycle for the Bank of Canada.
What do falling rates mean for the housing market?
The housing market in particular is expected to pick back up in the coming months after a marked slowdown in activity.