- There was a clear sense the balance of risks had changed
- The inflation picture hasn't really changed
- Early in the year we saw some upward momentum in core inflation but that momentum has come off
- There are still some mixed signals in inflation
- We're not being as forward-looking as normal
- At this point, inflationary pressures look a bit more contained
- A weakening economy will put additional downward pressure on inflation
- Tariffs are weakening the Canadian economy, you can see that acutely in related sectors
- We will be looking at exports and how businesses deal with higher costs
- We will be looking at the balance of risks in October
- We see some effects of counter-tariffs in food but most of those counter-tariffs have been dropped
- We are not expecting a recession, we are expecting growth of about 1% in H2
The market has shifted the pricing for a further October cut to 42% from 52% before the BOC decision. Further out the curve the picture is still largely the same with 29 bps priced in for next summer compared to 30 bps before the BOC.
Rogers:
- We are not contemplating any change in the deposit rate now
- We have a variety of tools we can use before the deposit rate
