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Macklem IMF Discussion Takeaways

CANADA
Coming towards the end of the fireside discussion at the IMF.
  • Further supporting the desire to get inflation all the way back to 2% otherwise needing to hike further: Our inflation target 1-3% band is not a "zone of indifference", want to get to 2% midpoint (recall that the forecasts show inflation coming down pretty quickly to 3% by summer (not far away) but then only moving lower slowly after that.
  • Differences with market rate expectations (with markets pricing cuts): From time to time, markets and central banks may not be aligned with expectations. If it’s because of a different view on the economy then that’s useful information to us. It’s a concern though if you think markets don’t understand our perspective or don’t believe us. That’s why being as clear as we can about our outlook, giving speeches on updates… those things will minimize any misunderstanding.

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