Free Trial

BoC’s Macklem On A Higher Neutral Rate

CANADA
  • Whilst most comments were a repeat, the highlight of Macklem’s Senate appearance late yesterday was that it’s possible that the neutral rate could move higher.
  • It was however in response to a specific question in that direction and if it was to move, it would expect to be done reasonably gradually.
  • The neutral rate was revised back up 25bps to 2-3% at the April decision in a move that surprised most analysts at the time, and with subsequent guidance from Macklem that the aim will be to take rates closer to neutral before pausing to take stock.
  • Note that in latest staff research, only one of the four models presented had a upper range in excess of the current 3% estimate, at 3.25%.

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.