Bank of Canada 'Considered the Merits' of Keeping Rate Unchanged in June: Minutes

   By Paul Vieira 
 

OTTAWA--Bank of Canada policymakers considered keeping their main interest rate unchanged in June and wait for two months of inflation data, but in the end agreed the consumer-price index was on a sustainable path toward their 2% target, according to a summary of their deliberations leading up to a June rate cut.

Two weeks ago, the Bank of Canada became the first Group of Seven central bank to reduce its policy interest rate by a quarter-point, to 4.75%, and said further reductions were possible should inflation continue to decelerate. The central bank sets interest rates to achieve and maintain 2% inflation.

According to the minutes, published Wednesday, members considered the risk of inflation picking up steam, like it did in the U.S. "Members considered the merits of waiting for additional monthly CPI data to gain further assurance before reducing the policy rate in July," said the minutes, which summarized deliberations that began on May 31, leading to the June 5 rate cut.

Ultimately, the minutes said, there was a consensus among senior central bank officials "there had been sufficient progress" on the inflation front -- namely, four straight months of easing in core prices -- to warrant a rate cut. Core inflation strips out volatile items, like food and energy.

Write to Paul Vieira at paul.vieira@wsj.com

(END) Dow Jones Newswires

June 19, 2024 13:45 ET (17:45 GMT)

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