Monetary policy-makers at the Bank of Canada are relying more heavily on their own reasoning to chart a course for the policy interest rate through conflicting economic signals tied to the war in the Middle East.
A summary of deliberations from the Bank of Canada governing council’s decision to hold the policy rate steady at 2.25 percent on March 18 was released Wednesday.
The report shows council members debated the best course of action for monetary policy with spiking energy prices set to fuel a rise in inflation at the same time as Canada’s economy underperforms.
The risk of rising inflation usually calls for an increase in the policy rate, while sluggish economic growth typically pushes the central bank toward rate cuts….