(Bloomberg) -- Bank of Canada officials debated holding rates or hiking by another quarter percentage point at their January decision, according to a summary of their deliberations.

The minutes-like document published Wednesday marks the first time the Ottawa-based central bank has formally opened a window into its decision-making process.

Governor Tiff Macklem and four other policymakers also discussed whether to maintain a data-dependent hiking bias, or explicitly communicate their intent to hold borrowing costs steady after raising the benchmark overnight rate by 25 basis points to 4.5%. In the end, they did the latter. 

“Members were in broad agreement that, going forward, it would be appropriate to pause any additional tightening to allow economic developments to unfold,” the bank said. Holding rates gives officials time to assess the full impact of the effects of the aggressive hiking cycle and “balance the risk of over- versus under-tightening.”

While the summary provides a glimpse into the primary concerns and data under consideration by Bank of Canada’s governing council, it offered sparse new information. Much of the document’s content was already communicated by Macklem and the bank over the past two weeks.

As such, the release didn’t have much impact on markets. The yield on Canadian government two-year bonds dipped slightly after the release, then rose again to trade at 3.934% as of 1:57 p.m. The loonie was little changed at C$1.3435 per US dollar. 

Unlike the US Federal Reserve and the Bank of England, rate decisions at the Bank of Canada are made by consensus rather than a vote of individual members. The report included no indication of dissent from members.

Going into the meeting, a still-tight labor market and a stronger-than-expected growth in the second half of last year were cited as reasons to go ahead with a hike.

The summary also showed officials intent on lowering inflation back toward the 2% target, on being clear about the conditional nature of the pause and on indicating they were “prepared to raise the policy further if these outside risks materialized.”

Still, the five-person panel “wanted to give a clear sense that they would need an accumulation of evidence” before considering to hike further.

Macklem laid out those key conditions Tuesday during a speech in Quebec City. Price gains for services need to slow, wage growth and inflation expectations need to moderate, and businesses need to normalize their price-setting behavior for officials to stay on the sidelines, he said.

The bank’s forecast is for inflation to fall to 3% by midyear and to 2% in 2024. Policymakers also see growth in output near zero in the first three quarters of this year, which will allow the economy to move from excess demand to modest excess supply and “relieve inflationary pressures,” Macklem said.

IMF Recommendation

Wednesday’s summary also highlighted concern among officials that the effects of tighter monetary policy could be larger than expected due to the housing market. But they acknowledged “expectations of future monetary policy easing could also spur buyers to re-enter the market.”

The publication of the minutes is in response to a report by the International Monetary Fund last year recommending the central bank be more transparent. It comes amid a broader push by the bank to restore its credibility after policy missteps that included failing to foresee the post-pandemic surge in inflation.

Macklem and his officials announce their next decision on March 8, when they are expected to hold rates at the current level, which is the highest in 15 years.

“The risk for policy remains skewed to more hikes through the first half of the year, at which point the risks likely start to turn the other way assuming inflation is well-behaved,” Benjamin Reitzes, a rates and macro strategist at Bank of Montreal, said in a report to investors after the summary was published.

(Updates with economist reaction in final paragraph.)

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