BoC Minutes: Some members were split over the sustainability of a rebound

Inflation Some members were concerned about signs of upward drift in medium-term inflation expectations, but all agreed longer-term inflation expectations remained well anchored. Members agreed to reiterate in their communications that they would not let higher oil prices lead to persistent inflation. Members saw limited evidence that higher oil prices were spilling over to the prices of other goods and services. Members felt the longer oil prices remain elevated, the greater the risk that their inflationary effects broaden. Growth Given resumption of growth and easing inflation, members agreed the trade-off facing monetary policy had diminished. Potential risks to growth include failure of businesses to continue to adapt to tariffs, reduced resilience in consumer spending, and stalled housing markets in major cities. Policy Outlook Despite this, members agreed uncertainty was still high, in part due to unpredictability of the Middle East conflict. Ahead of Bank of Canada's July 15 rate announcement, some Governing Council members were split over the sustainability of the rebound.