Bank of Canada Minutes Reveal A Neutral Stance, Not Hawkish, Says Rosenberg Research

09:13 AM EDT, 05/14/2026 (MT Newswires) -- The Bank of Canada's minutes for its April 29 rate decision were released on Wednesday, notes Rosenberg Research.

"By far", it said, the most important quote was: "With slack in the labour market and excess supply in the economy, businesses would be less likely to pass higher costs on to consumers. Given this starting point, and with the policy interest rate on the stimulative end of the range for the neutral rate of interest, members agreed they could look through the initial inflation shock from higher oil prices."

In other words, the research added, the "calm" CPI-trim and CPI-median measures and the weak labor market in Canada will stall any immediate rush to raise rates. The warnings were all about the risk that inflation would become "more persistent" in a sustained oil shock.

On balance, the minutes are still more hawkish than prior, but are explicitly two-sided and keep both cuts and hikes on the table, said the research. Hard to square that with the nearly two hikes that are still priced in, it added.

The BoC also touched on the housing market, which has been persistently weak, the research noted. The BoC described housing weakness as at least partly structural -- based on slower population growth and a lack of affordability -- rather than entirely cyclical.

Rosenberg said: "This is partly an exercise in blame-shifting: if it isn't entirely cyclical, the BoC's rate policy isn't the only cause. This might be true -- but we still assesses that the slow pace of easing in the last 18 months was a contributing factor to current housing weakness."

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