Bank of Canada — Governing Council Decision

Decision (Sept 17, 2025)

• Cut policy rate by 25 bps, lowering the overnight target to 2.50%.
• Decision was unanimous.
• Tone: easing resumed, with risks tilted to the downside.

Inflation & Outlook

• Inflation currently within the BoC’s 1–3% target range.
• Some core measures (“trim” / “median”) have ticked higher.
• Expectation: inflation eases back toward 2% midpoint as slack builds.
• Growth outlook: global slowdown, tariff/trade uncertainty, weakening domestic demand.
• Labour market showing stress: softer hiring, higher unemployment.

Policy Bias

• Overall stance: Dovish — door open to further cuts if inflation remains contained and labour market weakens further.

Analyst / Market Views

• Seen as dovish — cut ended the pause and signalled willingness to ease more.
• Analysts expect another cut possible later in 2025 if labour softness persists.
• Markets adjusted front-end yields lower; CAD weakened modestly.

Next Meeting

• Scheduled: 29 October 2025.
• Expectation: Hold or possibly cut another 25 bps depending on inflation and labour data.