BoC's Macklem: More rate hikes will be needed
|Bank of Canada (BoC) Governor Tiff Macklem said on Thursday more rate hikes will be needed to since there is more to be done on inflation, as reported by Reuters.
Additional takeaways
"We need additional information before we consider moving to a more finely balanced decision-by-decision approach."
"We have yet to see clear evidence that underlying inflation in Canada has come down; domestic inflationary pressures have yet to ease."
"Even after stripping out CPI components that are volatile or don't reflect generalized price changes, inflation is running at about 5%; that's too high."
Forward-looking indicators suggest the Canadian economy is slowing but labor markets remain tight and the economy is in excess demand."
"Recent decline in overall Canadian inflation is welcome news but inflation will not fade away by itself; price pressures remain high and continue to broaden."
"Inflation increasingly reflects what we are seeing in Canada; there is some evidence global inflationary pressures have begun to ease."
"Surveys show consumers and businesses are more uncertain about inflation and more of them expect it to be higher for longer."
"So far, longer-term inflation expectations remain reasonably well-anchored but Canadians will need to see inflation clearly coming down to sustain this confidence."
"We can't count on easing global price pressures to lower inflation in Canada."
"Recent depreciation of C$ vs USD will offset some of the global improvement in inflation trends by making US goods and vacations more expensive."
"Bank will focus more on CPI trim and CPI median measures of inflation; the bank is reassessing CPI common measure, which is becoming more difficult to use."
Market reaction
The USD/CAD pair largely ignored these comments and was last seen rising 0.8% on the day at 1.3725.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.