Bank of Canada Minutes Reveal Policymakers Saw Rate Hike as Necessary Despite Uncertainty

The Bank of Canada released minutes from its October 28 governing council meeting showing that senior policymakers agreed a rate increase was prudent even amid elevated uncertainty and the presence of economic slack. Council members explicitly recognized that uncertainty over the appropriate policy direction did not justify standing pat, concluding that raising rates was the right tool to dampen upside inflation risks.

The central bank raised its overnight rate by 25 basis points to 2.50% at that October 28 meeting, its first hike since July 2023. The minutes confirm the decision reflected a deliberate judgment call: slack in the economy was acknowledged, but the risk of inflation running higher than desired outweighed the case for holding rates steady. Economists have flagged the possibility of a follow-up increase at the bank's next decision on December 9.