Macklem Comments On Recession vs Soft Landing

• Final question to the Q&A, during which 2Y GoC yields moved back to session and 2007 highs of 3.97% (+5.5bps since Macklem remarks were published for +11bps on the day).

(In some parts paraphrasing)

• Our mandate is clear with primary responsibility for price stability, and we want to do this in the best way possible. We need to cool spending with a period of below-trend growth. That’s low growth, it doesn’t need to be a recession. Frontloading rate increases is the best chance to see a soft landing.
• It’s going to depend on how quickly or slowly these supply chain issues are resolved, how sticky inflation is in Canada and importantly how well anchored inflation expectations remain on 2% target.
• There is a path to a soft landing but it’s narrow and there are risks – business community should factor those risks into decisions. Inflation is a burden on all Canadians and we’re determined to do our job and get inflation back to 2%.