To the extent that the economic expansion continues and the current excess supply in the economy is gradually absorbed, some modest withdrawal of the present considerable monetary policy stimulus may become appropriate, consistent with achieving the 2 per cent inflation target over the medium term.

  • US expansion continues at somewhat slower pace
  • Developments in Europe point to a renewed contraction
  • Chinese deceleration greater than expected
  • Financial conditions have deteriorated since April
  • Domestic growth likely to continue at potential in near term
  • Forecasts 2.1% growth in 2012 vs 2.4% forecast in April
  • 2.3% in 2013, vs 2.4% in April
  • 2.5% in 2014 vs 2.2% in April

BOC much less concerned about external factors than I assumed. Still, USD/CAD not overly impressed by the hawkish rhetoric, falling a few pips to 1.0145.