The Bank of Canada meeting minutes were released. Some of the highlights
- Bank of Canada decision to cut rates by 50 BPS on Dec 11 was a close call – minutes of Governing Council meeting.
- Members discussed arguments both for cutting by 25 BPS and 50 BPS.
- Those in favor of a 50 BPS cut acknowledged that not all data called for such a reduction on Dec 11.
- This group said it seemed unlikely that a cut of 50 BPS would take rates lower than they needed to go over the next couple of meetings.
- Those in favor of a 25 BPS cut suggested policy could be patient while the full effects of past cuts became clearer.
- Decision to cut by 50 BPS reflected weaker-than-expected growth outlook and the fact that monetary policy no longer needed to be clearly restrictive.
- There was a range of views on how much further the policy rate would need to be reduced, and over what period that should happen.
- Members agreed that they would likely be considering further reductions in the policy rate at future meetings, and they would take each decision one meeting at a time.
This article was written by Greg Michalowski at www.forexlive.com.
