By David Ljunggren<\/p>\n
OTTAWA, July 29 (Reuters) – Ahead of the Bank of Canada’s July 15 interest rate decision, governors were split over the sustainability of the economic recovery, minutes of \u200bthe meeting showed on Wednesday.<\/p>\n
The bank left its benchmark overnight rate unchanged \u200cat 2.25% and predicted the economy would grow by 2.5% on an annualized basis in the second quarter after grinding to a halt in the first quarter.<\/p>\n
“Governing Council was confident about the rebound \u200bin GDP growth in the second quarter. But there was a range of \u200bviews among Governing Council members about the sustainability of the rebound \u2060beyond the near term,” the minutes said.<\/p>\n
“Members agreed they would need to monitor the \u200bdata closely for signs that growth was broadening as projected.”<\/p>\n
Among the possible reasons for disappointing \u200bgrowth were the failure of businesses to continue to adapt to U.S. tariffs, a stalled housing market in Toronto and Vancouver, fading consumer resilience and exports and business investment remaining flat, members said.<\/p>\n
The \u200bbank, which targets 2% inflation, says it will look through the direct effects of \u200bhigher oil prices. Governors noted there was limited evidence that higher oil prices were spilling over to \u200cthe \u2060prices of other goods and services.<\/p>\n
“But the longer oil prices remain elevated, the bigger the risk that their inflationary effects broaden. Members agreed to reiterate in their communications that they would not let higher oil prices lead to persistent inflation,” the minutes said.<\/p>\n
Some members \u200bwere concerned about signs \u200bof upward drift \u2060in medium-term inflation expectations, but all agreed longer-term inflation expectations remained well anchored.<\/p>\n
The combination of the Middle East conflict and U.S. trade \u200bpolicy is complicating the bank’s job. If it hikes rates \u200bto counter \u2060the effect of higher oil prices it could hurt the economy but if it cuts rates to boost growth that could trigger a spike in inflation.<\/p>\n
“Overall, after a period of weak \u2060growth \u200band a spike in inflation, growth was resuming and \u200binflation was easing. Members agreed that this meant the trade-off facing monetary policy had diminished,” the minutes said.<\/p>\n
“However, \u200buncertainty was still high.”<\/p>\n
(Reporting bu David Ljunggren, editing by Fergal Smith)<\/p>\n
((Reuters Ottawa editorial; david.ljunggren@tr.com, opens new tab))<\/p>\n
Keywords: CANADA CENBANK\/<\/p>\n
Disclaimer:\u00a0The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and\/ or damages arising from the use of this publication.<\/p>\n","protected":false},"excerpt":{"rendered":"By David Ljunggren OTTAWA, July 29 (Reuters) – Ahead of the Bank of Canada’s July 15 interest rate…\n","protected":false},"author":2,"featured_media":150031,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[6244,6232,17,6237,6239,6231,6242,6235,6233,6236,381,1632,6243,6234,6223,6245,6228,6246,6230,6225,6226,6224,6227,113,6229,6241,6247,1633,6240,6238],"class_list":["post-150030","post","type-post","status-publish","format-standard","has-post-thumbnail","category-canada","tag-bank-forecasts","tag-bitcoin-news","tag-canada","tag-central-banks","tag-charts","tag-crypto-news","tag-currency","tag-economic-reports","tag-ethereum-news","tag-forecasts","tag-global-economy","tag-gold","tag-international-policy","tag-interviews","tag-kitco-news","tag-market-nugget","tag-metals","tag-mining-minutes","tag-mining-news","tag-palladium","tag-pgm","tag-platinum","tag-platinum-group-metals","tag-politics","tag-precious-metals","tag-rare-earth-metals","tag-roundups","tag-silver","tag-tech-metals","tag-us-dollar"],"_links":{"self":[{"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/posts\/150030","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/comments?post=150030"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/posts\/150030\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/media\/150031"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/media?parent=150030"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/categories?post=150030"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/tags?post=150030"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}