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Macklem: Clear Consensus That Premature To Discuss Cuts

CANADA
Governor Macklem in BoC Q&A:
  • When asked whether there were discussions on rate cuts at today's BoC decision, Governor Macklem said Governing Council saw a clear sense that yes inflation is coming down but it remains concerned about its persistence - we need to let monetary policy keep working and there was a clear consensus to keep rates on hold.
  • Our forecast has raised our confidence that we’ve raised inflation enough to get inflation back. Indicators show some progress but it’s uneven. As such there was a clear consensus that it's premature to discuss reducing our policy rate.
When pushed on the matter later on:
  • It’s important that we don’t give Canadians a false sense of precision. We’re being very clear about the conditions we need to see to start to discuss interest rate cuts.
  • We’re going to see how inflation evolves. We’ve seen this push and pull on inflation in recent months. In the months ahead, and we expect to continue to see this.
  • There’s been clear progress on a number of indicators (including corporate pricing behaviour not normal yet but normalizing in fairly sustained way) but at the same time short-term inflation expectations elevated and wage growth continues at 4-5%.
  • The progress has given us the confidence that 5% is high enough but the uncertainty suggests we need to hold and see where we are.
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