{"id":15272,"date":"2023-09-21T14:03:34","date_gmt":"2023-09-21T14:03:34","guid":{"rendered":"https:\/\/prosfunds.com\/news\/bank-of-canada-struck-intentionally-hawkish-tone-after-last-rate-decision-minutes\/"},"modified":"2023-09-21T14:03:35","modified_gmt":"2023-09-21T14:03:35","slug":"bank-of-canada-struck-intentionally-hawkish-tone-after-last-rate-decision-minutes","status":"publish","type":"post","link":"https:\/\/prosfunds.com\/?p=15272","title":{"rendered":"Bank of Canada struck intentionally hawkish tone after last rate decision – minutes"},"content":{"rendered":"
\n

By Steve Scherer and David Ljunggren<\/p>\n

OTTAWA, Sept 20 (Reuters) – The Bank of Canada wanted to send the message that interest rates would not be coming down soon when it left them at a 22-year high after a policy meeting earlier this month, minutes published on Wednesday showed.<\/p>\n

The Bank of Canada (BoC) kept its key rate at 5% on Sept 6, noting the economy had entered a period of weaker growth, but said it could hike again should price pressures persist.<\/p>\n

A day later Governor Tiff Macklem said interest rates may not be high enough to bring inflation back down to its 2% target even after 10 hikes of a total of 475 basis points since March of last year.<\/p>\n

The hawkish tone struck by the BoC since the latest rate decision was intentional, according to the minutes, or summary of deliberations, of the six Governing Council members.<\/p>\n

They “considered the possibility that their decision could be misinterpreted as a sign that policy tightening had ended and that lower interest rates would follow,” the summary read.<\/p>\n

It continued: “They agreed that they did not want to raise expectations of a near-term reduction in interest rates, given that they only considered keeping the policy rate where it is or raising it further.” <\/p>\n

The BoC emphasizes that core, or underlying inflation, has been sticky. Deputy Governor Sharon Kozicki said on Tuesday it was above a level consistent with achieving the 2% target.<\/p>\n

Also on Tuesday, official data showed headline inflation jumped to 4.0% in August from 3.3% in July and two of three of the BoC’s core inflation measures also gained.<\/p>\n

After the August inflation data were released, money markets raised bets for a rate hike after the next policy meeting on Oct. 25. On Wednesday the markets saw a 43% chance of an increase, compared with 23% before the figures came out on Tuesday.<\/p>\n

In January, the BoC said it was pausing its rate hikes to let them sink in, prompting money markets to start pricing in cuts to borrowing costs this year and sparking a jump in housing prices, which had been slumping.<\/p>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

By Steve Scherer and David Ljunggren OTTAWA, Sept 20 (Reuters) – The Bank of Canada wanted to send the message that interest rates would not be coming down soon when it left them at a 22-year high after a policy meeting earlier this month, minutes published on Wednesday showed. 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