BoC Governor Tiff Macklem indicated the central bank’s intent to continue cutting its policy rate if the economy aligns with central bank’s forecast. However, he acknowledged uncertainty regarding the precise pace and end-point of the easing cycle, remarking overnight, “We don’t know exactly the pace. We don’t exactly know where the landing is.”
Macklem also addressed speculation around the size of future rate cuts, clarifying that larger-than-quarter-point reductions are not limited to emergencies or economic downturns.
With the aggressive rate hikes in recent memory, he suggested that “it makes sense to take some bigger-than-normal steps”, signaling that larger steps on the way down could be reasonable as well.
