STIR: Sept BOC Cut Implied At Above 50% After GDP; Next Week's Jobs Data Key

Following are the Instant Answers for the Bank of Canada interest-rate decision:

• Overnight Rate Target (2.75%, unchanged, as expected)
• Does the Bank signal it is prepared to LOWER rates in the future? Yes
• Does the Bank reiterate it could LOWER rates if the economy weakens amid tariffs and inflation is contained? No
• Does the Bank signal it is prepared to RAISE rates in the future? No
• Does the Bank signal it intends to leave rates on hold? Not answered

• BOC HOLDS 2.75% RATE, MAY CUT IF GROWTH AND INFLATION SLOW
• BOC SAYS CAD STRENGTH IS HELPING TO TRIM IMPORT COSTS
• BOC PRESENTS THREE ECONOMIC SCENARIOS AMID TARIFFS
• BOC: LACK OF FORECAST DOESN'T IMPEDE ABILITY TO TAKE DECISIONS
• BOC SAYS UNDERLYING INFLATION HAS QUICKENED TO AROUND 2.5%
• BOC CENTRAL SCENARIO HAS Q2 GDP -1.5% ANNUALIZED, Q3 +1.0%
• BOC CENTRAL SCENARIO SHOWS CORE CPI +3.1% IN Q2, Q3 AND Q4

• Bank of Canada holds 2.75% rate for third time in a row as expected by all economists.
• BOC decision says could cut "if a weakening economy puts further downward pressure on inflation and the upward price pressures from the trade disruptions are contained." At the prior meeting the Governor's press statement said could cut if the economy weakens and "cost pressures on inflation are contained." 
• BOC says Canada economy showing some resilience even amid US tariffs. 
• Due to trade uncertainty the Bank gave three economic scenarios-- current tariffs, escalation and de-escalation. 
• Current tariff scenario shows Q2 annualized GDP will be -1.5%, and Q3 +1%. Core inflation in Q3 and Q4 seen at 3.1%.
• "The lack of a conventional forecast does not impede our ability to take monetary policy decisions. But the unusual degree of uncertainty does mean we have to put more weight on the risks, look over a shorter horizon than usual, and be ready to respond to new information," Governor Macklem said Wednesday. 
• BOC says underlying inflation accelerated to around 2.5% recently from about 2% in H2 last year with shelter costs the biggest driver.  
• BOC says CAD appreciation lowering import costs. 
• "We need to proceed carefully, with particular attention to the risks and uncertainties facing the Canadian economy. These include: the extent to which higher US tariffs reduce demand for Canadian exports; how much this spills over into business investment, employment and household spending; how much and how quickly cost increases from tariffs and trade disruptions are passed on to consumer prices; and how inflation expectations evolve," Macklem said.