Bank of Canada expects to release baseline projections for economy, inflation in October - minutes of meeting

Core Viewpoint - The Bank of Canada is set to release baseline projections for the economy and inflation in its upcoming monetary policy report, following a period of uncertainty regarding the impact of U.S. tariffs on the Canadian economy [1][2] Economic Projections - The central bank had previously refrained from providing definitive economic estimates due to uncertainties surrounding U.S. tariffs, but now expects to present a baseline projection for growth and inflation [2] - The economy is anticipated to grow in line with the "current tariff scenario" outlined in the July monetary policy report [6] Monetary Policy - The Bank of Canada reduced its key policy rate to 2.5%, the lowest in three years, and indicated readiness for further cuts if economic risks increase [3] - Money markets are pricing in a 55% chance of an additional 25 basis point rate cut on October 29 [3] Inflation and Tariffs - The Governing Council noted that most counter-tariffs on U.S. goods have been removed, reducing the risk of inflationary pressures from tariffs on Canadian consumers [4] - Lower input costs from labor, shipping, and materials are expected to contribute to lower inflationary pressures in the future [4] Economic Growth Factors - Economic growth may slow further due to adjustments in business investment and employment, with slower population growth and a softer labor market potentially dampening household spending [5] - Weak business investment is expected to continue affecting economic growth in the latter half of the year [5]