Macklem On What The Bank Needs To See Not Hike Further

Macklem: We spend a lot of time trying to look through inflation volatility. We want to see clear evidence that core inflation is moving down, to give us more confidence that headline is moving towards target on a sustainable basis. We’re going to be watching trim and median measures very closely, taking them apart. He then goes over three of the four usual forward-looking areas (balance between demand and supply, wage growth vs productivity growth, corporate pricing behaviour), omitting broader inflation expectations. If those start to normalize then our confidence that inflation is coming down and we probably won’t need to hike further. But we've been very deliberate and are leaving the door open to further increases: if we see inflationary pressures persist, we are prepared to hike interest rates further.