The MPC further recommends that the Bank keep the target at 5.00 percent in January 2024, before reducing it to 4.75 percent by June of 2024 and to 4.00 percent by December of 2024. [...] By June of 2024, the majority of members voted for a lower target: three called for a target of 5.00 percent, four for a target of 4.75, and the other four for targets between 4.00 and 4.50 percent. [...] Nine of the 11 members attending the meeting called for the Bank to maintain that schedule, while one called for the Bank to slow it – that is, buy bonds to replace at least part of those that will mature – and one called for the Bank to accelerate the reduction in its holdings. [...] The group’s recommendation for no change in the overnight rate target at the next two settings, followed by reductions through 2024, reflected a mix of caution about the near-term stickiness of inflation and confidence that monetary restraint to date and a softening economy will produce inflation much closer to the Bank’s 2 percent target by 2025. [...] Some of the bank economists in the group emphasized the heterogeneity of mortgage maturities, terms and conditions, as well as the number of households with healthy bank deposits and spending patterns that do not show evidence of financial distress.
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