Bank of Canada Governors Divided on Economic Rebound

The Bank of Canada's governors were divided over the sustainability of the country's economic rebound in July, minutes from their meeting showed. The bank had left its benchmark overnight rate unchanged at 2.25% and predicted GDP growth of 2.5% on an annualized basis in the second quarter.

While the Governing Council was confident about the rebound, members expressed concerns that it may not be sustainable beyond the near term. They cited potential reasons for disappointing growth, including businesses struggling to adapt to US tariffs and a stalled housing market in Toronto and Vancouver.

The bank's governors also discussed the impact of higher oil prices on inflation, with some members expressing concern about signs of upward drift in medium-term inflation expectations. However, all agreed that longer-term inflation expectations remained well anchored.