BoC nears interest rate cuts as inflation eases, says Macklem

BoC Governor Tiff Macklem, at a Senate committee testimony, indicated that Canada is edging closer to conditions that would allow for easing monetary policy. “The short answer is we are getting closer,” he affirmed.

Inflation in Canada has moderated effectively, remaining under 3% since January and aligning with the central bank’s forecasts. This stabilization is expected to persist through the first half of 2024, with key core measures of consumer prices showing a consistent downward trend.

“We are seeing what we need to see, but we need to see it for longer to be confident that progress toward price stability will be sustained,” Macklem explained.

Furthermore, Macklem addressed the impact of fiscal policy on the economic outlook, noting that recent governmental fiscal plans are unlikely to significantly alter the Bank’s projections for the economy or inflation.