That’s according to the central bank’s summary of deliberations detailing the discussions governing council members had in the lead-up to the March 6 interest rate announcement.
What did the Bank of Canada’s governing council agree on?
The summary says governing council members agreed that if the economy and inflation evolve in line with the Bank of Canada’s projections, the central bank will be able to begin cutting interest rates sometime this year.
And while members agreed on the conditions the Bank of Canada needs to start lowering its policy rate—they want to see further and sustained easing in the bundle of indicators they call “underlying inflation”—they had varying views on when those conditions will be met.
“There was some diversity of views among governing council members about when there would likely be enough evidence that these conditions were in place, and how to weight the risks to the outlook,” the summary said.
The Bank of Canada opted to continue holding its interest rate at 5% earlier this month and brushed off questions on the timing of rate cuts.
Governor Tiff Macklem said the central bank did not want to move too quickly, only to have to reverse course later.
Recent data shows Canada’s annual inflation rate came in lower than expected for a second consecutive month, reaching 2.8% in February.
When will the Bank of Canada lower its policy rate?
As inflation continues to ease and the economy slows, forecasters continue to expect the Bank of Canada to begin lowering its policy rate around the middle of the year.
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