BOC's Macklem: There could be a need to raise the policy rate further
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From Bank of Canada Governor Tiff Macklem: There could be a need to raise the policy rate further Will proceed carefully given uncertainties Decisions will be taken one meeting at a time Outlook for inflation has deteriorated Hike needed to reduce risk elevated energy prices beco
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4 itemsBank of Canada head Macklem warns consecutive rate hikes possible if oil prices stay high
The desk interprets Governor Tiff Macklem's recent comments as a significant shift towards a more hawkish stance for the Bank of Canada, particularly in light of rising oil prices potentially driving broader inflation. Per the full note [source], Macklem indicated that sustained high oil prices could necessitate consecutive interest rate hikes, a marked change from the previous easing bias. Current CPI inflation has risen to 2.4%, with projections suggesting a peak of around 3% in April, reinforcing the urgency of the central bank's monitoring of inflationary pressures. This shift aligns with our consensus target of 1.075 for CAD/USD, reflecting a cautious yet vigilant approach to monetary policy amidst global uncertainties.
BOC’s Macklem: It could take some time for higher fuel margins to normalise
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