Little New From Macklem In Media Q&A, CAD Assets Driven By Powell Reaction

Not much new in English sections of media Q&A from Gov. Macklem.

• He reiterated that it's far too soon to talk about rate cuts.
• When asked about confidence in inflation decelerating relatively quickly against a record low u/e rate, Macklem pointed to existing progress in short-term measures of durable goods inflation but cautioned uncertainty on how quickly service inflation cools, which is seen taking longer. The BoC is banking on slower growth over next 2-3 quarters to shift the economy from clear excess demand to modest excess supply, as noted at the Jan 25 decision, but “I'm not going to pretend that there isn’t more uncertainty about that aspect of our projection”.
• Canadian FI remains driven by US fallout from a Powell-induced rally and then paring of gains (BAX yields back +7-8bps higher on the day in Dec'23-1H24, 2Y GoC yields +2bp) whilst similarly USDCAD remains at the whim of broader USD moves (currently -0.25% at 1.3412 but still within the session's almost 90 pip range).