BOC Meeting Minutes: Sees future rate adjustments would likely be small.

最近のFX関連情報Central Banks

The BOC Meeting meeting minutes are out for the April 29 meeting.

International economy

  • Middle East war increased uncertainty, pushed oil prices sharply higher, and added to global inflation pressures.
  • US economy remained relatively solid with resilient consumer spending and continued AI investment, although hiring stayed soft.
  • China’s economy was viewed as relatively insulated near term, supported by strong exports.
  • Euro area growth was expected to weaken due to higher energy costs and supply concerns.
  • Policymakers noted that financial markets had remained surprisingly resilient despite geopolitical risks.

Commodity prices and financial markets

  • Oil prices above $100 were a major focus, with the Bank assuming prices would eventually ease but acknowledging high uncertainty.
  • Higher energy prices also lifted some commodity and food prices.
  • Bond yields moved higher, while the US dollar strengthened against most major currencies.
  • The Canadian dollar remained relatively stable near 73 US cents.

Canadian economy

  • Growth was expected to resume after a weak end to 2025.
  • Consumer and government spending were supporting activity, while trade uncertainty continued to weigh on business investment and exports.
  • Business sentiment improved modestly despite tariff uncertainty.
  • Members viewed the economy as showing better resilience than feared.

Housing market

  • Policymakers discussed ongoing housing market weakness.
  • High uncertainty, affordability problems, slower population growth, and lower investor demand were seen as weighing on housing activity.
  • The Bank believes rebalancing the housing market will take time.

Labour market

  • The labour market remained soft but stable.
  • Job growth slowed and hiring remained weak.
  • The unemployment rate stayed in a 6.5%–7.0% range.
  • Slower population growth and aging demographics were also affecting labour force growth.

Inflation outlook

  • Inflation had been near the 2% target for over a year before rising due to higher gasoline prices.
  • Policymakers saw the recent inflation rise as mainly an energy-driven shock.
  • Core inflation measures were still showing easing underlying pressures.
  • Food and rent inflation remained elevated.
  • Long-term inflation expectations were viewed as well anchored.

Growth and inflation forecasts

  • GDP growth was expected to gradually improve through 2028.
  • Inflation was expected to temporarily rise toward 3% before returning to 2% as oil prices ease.
  • The Bank continued to expect modest overall growth despite geopolitical risks.

Risks and uncertainty

  • The two biggest risks were:

    • US trade policy and tariffs
    • The evolving Middle East conflict
  • Policymakers stressed that both risks could materially affect growth and inflation.
  • Members emphasized the need to remain flexible and nimble given elevated uncertainty.

Monetary policy discussion

  • The Bank agreed it could initially look through the energy-driven inflation shock because underlying inflation pressures remained contained.
  • However, policymakers warned that if higher oil prices led to broader inflation pressures, rates might need to rise further.
  • Members discussed the possibility that inflation expectations could shift more quickly given Canadians’ recent experience with high inflation.

Policy decision

  • Governing Council agreed to leave the policy rate unchanged at 2.25%.
  • The Bank indicated that if the economy evolves as expected, future rate adjustments would likely be small.
  • Policymakers did not rule out:

    • Rate cuts if trade risks hurt growth
    • Rate hikes if inflation broadens and becomes persistent

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The last policy meeting from the Bank of Canada was on April 29, 2026, and the Bank left its overnight rate unchanged at 2.25%.

Governor Tiff Macklem struck a cautious and balanced tone. The main themes from the statement and press conference were:

  • Inflation has moved back higher, largely because of the spike in oil and gasoline prices tied to the Middle East conflict. CPI rose from 1.8% in February to 2.4% in March and the Bank expects inflation to temporarily peak near 3% in April.
  • Despite the near-term inflation rise, the Bank still expects inflation to move back toward the 2% target by 2027, assuming oil prices ease over time.
  • Macklem emphasized the Bank will not overreact to temporary energy-driven inflation, but warned that if higher energy prices begin feeding into broader, persistent inflation, the Bank would respond.
  • The Bank said the Canadian economy is still dealing with the effects of US tariffs and trade uncertainty, which are weighing on exports, business investment, and hiring.
  • Growth expectations were modest:

    • 2026 GDP forecast: 1.2%
    • 2027 GDP forecast: 1.6%
    • 2028 GDP forecast: 1.7%
  • Macklem said if the economy evolves broadly as expected, future rate moves would likely be “small.” That suggested the Bank believes rates are close to neutral/right for now.
  • However, the Bank made clear that the direction of the next move is not predetermined. Depending on how inflation, oil prices, tariffs, and growth evolve, rates could go either higher or lower.
  • A key underlying message was that policymakers are operating in an unusually uncertain environment and will rely more on judgment and risk management rather than mechanical forecasting models.

Overall, the tone was:

  • Cautious on inflation
  • Concerned about global risks and tariffs
  • Not eager to cut rates
  • But also not signaling imminent hikes unless inflation broadens beyond energy.

The USDCAD is trading in an up and down pattern today. On the upside, the highs ticked into key resistance swing area between 1.3708 and 1.3715. The high prices today reached 1.3712. The 100 day moving averages just above that area at 1.37177. Recall from yesterday, the price moves above those levels including the 100 day moving average, but quickly reversed turning the buyers into sellers. The good news for the buyers is that the rising 100 hour moving average remains comfortably below at 1.36806 – keeping the buyers in play. The battle is on between 100 hour MA and the 100 day MA.

This article was written by Greg Michalowski at investinglive.com.

最近のFX関連情報Central Banks

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