Rate CUTS if War Ends?

The Bank of Canada's recent interest rate announcement and subsequent press conference reveal the challenges of managing economic uncertainty amidst the war with Iran. The governor acknowledges that rate cuts were probable if not for the war, a stark contrast to previous stances. Higher oil prices present a dilemma, potentially boosting export income while squeezing consumer spending. The central bank is trying to balance managing inflation expectations without triggering an economic downturn, a situation complicated by the current low inflation starting point compared to 2022. The governor stresses uncertainty, while also facing scrutiny over past monetary policies and media complicity. Monitoring money supply and loan activity is crucial for gauging future inflation.