Bank of Canada minutes: Council split over cutting or holding rates due tariffs risks

The Bank of Canada revealed the minutes of the meeting held on April 16, which showed that the Governing Council was divided over whether to cut rates or keep them unchanged.

Key highlights:

All BoC members agreed to maintain a robust survey and outreach plan to better understand in real-time how the economy was adapting.
Members agreed they should be less forward-looking than usual.
While there were differences in views, everyone agreed there was a great deal of uncertainty and the situation could change quickly.
BoC members favoring no change wanted to gain more information on US tariffs, supporting a wait and see approach.
They felt another cut could be premature, given upward pressure on inflation from tariffs could come quickly.
BoC members favoring a cut said the bank would have the flexibility to reduce rates further as long as medium- to long-term inflation expectations remain anchored.
They cited that muted near-term inflation risks and signs that the economy was weakening.
They added that the need for timely action was highlighted, given lags in the transmission of monetary policy actions to the economy and inflation.