Steve Leeman, CNBC. Mr. . Chairman, can you characterize the uh the meeting in terms of you said strongly differing views was this a close call this cut or was it a close call maybe the other way because you had dissents on both sides.Thanks. >> So I was referring to uh the discussion about to the extent it related to December. You saw we had we had two descents, one for 50 and one for no cut.So, um, you know, that was a strong solid vote in favor of this cut. This the strongly, uh, uh, differing views were ...

Core Viewpoint - The Bank of Canada has reduced its key overnight interest rate to 2.25%, marking the lowest level since July 2022, and indicated that this may conclude its cutting cycle unless inflation and economic outlook change [1][2][3] Economic Growth Projections - The Bank of Canada revised its economic growth forecast for 2025 down to 1.2% from an earlier estimate of 1.8%, and for 2026 down to 1.1%, with a recovery expected to 1.6% in 2027 [2] - The bank anticipates annualized growth of 0.5% in the third quarter and 1% in the fourth quarter [5] Inflation Management - The Bank aims to keep annual inflation anchored at 2%, the midpoint of its target range of 1% to 3%, with an expectation that inflation will average around 2% over the year [5] - Consumer prices are projected to average approximately 2.1% in 2026 [5] Economic Conditions - Canada's economy contracted by 1.6% in the second quarter, with early indicators suggesting a potential near-contraction in the third quarter [4] - The current economic weakness is characterized as a structural transition rather than merely a cyclical downturn, limiting the effectiveness of monetary policy in stimulating demand while maintaining inflation targets [4] Trade Policy Impact - The Bank of Canada acknowledges that U.S. trade policy has been a significant factor affecting demand and costs for businesses, with the expectation that these forces will offset each other [3] - The range of possible economic outcomes remains wider than usual due to the unpredictability of U.S. trade policy [6] Currency and Market Reactions - Following the interest rate announcement, the Canadian dollar strengthened, trading up 0.22% to 1.3915 against the U.S. dollar [6] - Money markets currently do not anticipate any further rate cuts until March of the following year [6]

Core Viewpoint - The Bank of Japan (BOJ) is expected to revise its economic and inflation forecasts upward in its upcoming quarterly review, potentially leading to an interest rate hike in October [1][3]. Economic Forecasts - The BOJ's current forecast anticipates a 0.6% economic expansion for the fiscal year starting in April and a 0.7% growth in fiscal 2026 [5]. - Recent data indicates Japan's economy grew at an annualized rate of 2.2% in the second quarter, surpassing initial estimates due to strong consumption [5]. Interest Rate Outlook - There is a 50% probability of a rate hike during the BOJ's policy meeting on October 29-30, coinciding with the release of new growth and inflation forecasts [1]. - A potential 25-basis-point rate increase is considered manageable for economic growth, as borrowing costs would remain below neutral levels [3]. Risks and Considerations - BOJ Governor Kazuo Ueda emphasizes the need to assess the impact of U.S. tariffs on Japan's economy and wage outlook before deciding on rate hikes [2]. - If the BOJ focuses on downside risks, such as weaknesses in exports and corporate profits, it may delay rate hikes until March next year [4]. Influencing Factors - The upcoming "tankan" business survey, scheduled for October 1, could significantly impact the BOJ's decision regarding interest rates [6].

Core Insights - The Federal Reserve's latest projections indicate two additional rate cuts in 2025, following a recent quarter-point cut, bringing the benchmark rate to a range of 3.5%-3.75% by year-end [1][2] - The Fed's recent decision marks the first rate cut of the year, lowering the benchmark rate to a range of 4%-4.25% [2] - Economic growth projections have been raised, while inflation and unemployment forecasts remain steady, although downside risks to employment have increased [3] Rate Projections - The Fed's dot plot suggests a decline in the fed funds rate to 3.6% this year, down from a previous projection of 3.9% [4] - Markets had anticipated two to three rate cuts in 2025, with the Fed having already lowered rates by a full percentage point in 2024 [5] - Officials also project one additional rate cut in 2026, consistent with previous forecasts [5] Divergence Among Officials - There is a notable division among FOMC officials regarding the near-term outlook, with 18 officials predicting at least one rate cut in 2025, and one projecting as many as six cuts [6] - Only one FOMC member anticipated no change in rates this year, a decrease from seven in June, indicating a more dovish stance [6] - Fed Chair Jerome Powell acknowledged the wide range of views among officials, describing the current situation as "highly unusual" [7]