Macklem October 25
  • Prior was 5.00%
  • Statement repeats that BOC "is prepared to raise the policy rate further if needed"
  • Data "suggest the economy is no longer in excess demand"
  • BOC saw "further signs that monetary policy is moderating spending and relieving price pressures"
  • The slowdown in the economy is reducing inflationary pressures in a broadening range of goods and services prices
  • Governing Council wants to see further and sustained easing in core inflation
  • The global economy continues to slow and inflation has eased further
  • US growth has been stronger than expected but is likely to weaken in the months ahead
  • Growth in the euro area has weakened
  • Oil prices are about $10-per-barrel lower than was assumed in the October MPR
  • The US dollar has weakened against most currencies, including Canada’s
  • Higher interest rates are clearly restraining spending: consumption growth in the last two quarters was close to zero
  • The labour market continues to ease: job creation has been slower than labour force growth
  • Full statement

USD/CAD traded at 1.3570 just before the decision and is down about 10 pips afterwards. There's no strong push here against market pricing for cuts but you can easily infer that high rates have largely done their job. The market is pricing in about a 20% chance of a January rate cut, though that's ticked down slightly since the decision. A March cut remains 90% priced in.

The BOC's Gravelle speaks tomorrow and that will be a further opportunity for the central bank to push back against market pricing.