BoC Macklem concerned that inflation progress has slowed

BoC Governor Tiff Macklem said in a speech overnight that 2% inflation target is now in sight”. However, he cautioned, “we are not there yet and we are concerned progress has slowed”. Also, “monetary policy still has work to do”.

In a bid to harmonize the potentially conflicting risks of “under- and over-tightening,” BoC opted to hold policy rate at 5% this week. Macklem didn’t rule out the possibility of further rate hike, mentioning that such a step might become necessary “if inflationary pressures persist.”

As Canada navigates a period riddled with economic uncertainties, the central bank adopts a vigilant stance, closely monitoring an array of indicators to assess the trajectory of inflation. Macklem highlighted the multifaceted nature of the factors affecting inflation data month on month, distinguishing between temporary influences and those with a potential for a lasting impact.

Full speech of BoC Macklem here.