BoC Governor Tiff Macklem, in a speech overnight, suggested that more interest rate cuts are likely, contingent on incoming economic data. He acknowledged, “With the continued progress we’ve seen on inflation, it is reasonable to expect further cuts in our policy rate.”
However, he emphasized that the timing and pace of such cuts would be determined by the assessment of future inflation and broader economic conditions.
Macklem noted that economic growth had picked up in H1, but some recent indicators suggest it may not be as robust as previously anticipated. “We will be closely watching consumer spending, as well as business hiring and investment,” he said.
He also expressed the need to see core inflation ease further. Shelter cost inflation remains elevated but is beginning to decline, and BoC is looking for this trend to continue. “Continued progress on inflation will be crucial to ensure our policy remains effective,” Macklem added.
