The BoC’s September summary showed policymakers debated whether to hold the policy rate at 2.75% or lower it by 25bps. In the end, members judged that the balance of risks had shifted enough to warrant a cut to 2.50%, citing weaker economic conditions and softer inflation pressures.
Council members noted three key developments since July that supported easing. First, the economy had weakened further, with signs of labor market softening. Second, recent inflation readings suggested that core price pressures were easing. Third, the removal of most retaliatory tariffs reduced the risk of renewed upside pressure on prices.
Against this backdrop, the Governing Council concluded that “inflationary pressures appeared more contained” and that a lower policy rate would better balance risks. They emphasized that uncertainty remains high, meaning decisions will continue to be guided by a “risk-management approach”. Policymakers agreed they would keep looking “over a shorter horizon than usual” and remain prepared to respond to new developments.
