Central Bank Meeting Minutes: The decision to cut interest rates by 50bp for the second consecutive time was a difficult one.

The Bank of Canada's meeting minutes on December 24th showed that the decision to cut the Central Bank's interest rate by 50 basis points for the second time in a row was a '50/50 choice', with some policymakers initially leaning towards a smaller rate cut. Some members indicated that a 25 basis point cut would be the best move, allowing time to assess the impact of rate cuts since June. The rate cuts have already led to stronger consumer and real estate activity. They believe that as the comprehensive impact of previous rate cuts becomes clearer, policy can remain patient. However, ultimately, policymakers lowered the Benchmark Interest Rate by 50 basis points, as they had previously concluded that with inflation reaching 2%, economic supply surplus, and a weak rise outlook, monetary policy 'no longer needs to be significantly restrictive'. However, they also acknowledged that not all recent data indicated the need for a 50 basis point rate cut. Nevertheless, they also believe that a cut of this magnitude is unlikely to make the Interest Rate 'lower than necessary for the next few meetings'.