BoC Macklem sees forecasts more fragile amid rising uncertainty

In an interview with Reuters, BoC Governor Tiff Macklem warned that the global environment faces an unusually high risk of fresh disruptions. He said geopolitical risks are “elevated” and that the potential for new shocks has increased materially. He also cited attacks on the independence of the Fed as an added source of uncertainty this year.

As a result, he said the Bank of Canada’s latest economic projections are more “vulnerable” than usual, with “more things that can go wrong around that forecast.”

Asked whether risks later this year lean more toward a rate cut or a hike, Macklem declined to assign a directional bias. He said the level of uncertainty makes it difficult to meaningfully assess probabilities. “And, to be honest, I think we’re finding that difficult,” he added.

Macklem pointed to renewed tariff threats from the White House and the upcoming review of the US-Mexico-Canada trade framework as clear risks to the outlook, on top of broader global uncertainties.

The comments followed the BoC’s decision this week to keep rates on hold and publish updated forecasts that continue to show modest growth in 2026 and 2027, broadly unchanged from October.