Summary of BoC Governing Council’s October 23 meeting highlights a decisive stance among members to prioritize growth through an aggressive 50bps rate cut. While members initially discussed the possibility of a modest 25bps cut, a “strong consensus” emerged in favor of a larger reduction to counter economic headwinds.
The Governing Council members expressed “increasingly confident” that inflationary pressures are expected to ease, reducing the need for a restrictive policy stance. Some members voiced concern that an unusual 50bps cut might be perceived as a signal of “economic trouble.” Despite this, they agreed that a more substantial cut was justified, given the “ongoing softness” in the labor market and the need to bolster growth to “absorb excess supply” in the economy.
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