Bank of Canada Mulled September Hold Amid Strong Consumption

The Bank of Canada considered holding interest rates steady in September amid trade uncertainty and stronger consumption, but opted to cut given signs of a weakening economy and tamer core inflation.

Policymakers led by Governor Tiff Macklem trimmed the policy rate to 2.5% last month because Canada’s economy and jobs market had been damaged by the trade dispute with the US. But while exports and business investment contracted in the second quarter, “stronger than expected” momentum in household consumption was cited as a reason to hold borrowing costs steady.