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Bank of Canada Governor: October rate decision hinges on inflation forecast; slow action could force larger hikes
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Bank of Canada Governor Tiff Macklem stated that inflation forecasts will be a key factor in the central bank's October monetary policy decision, noting that policymakers must decide whether current interest rates are sufficient or if further hikes are needed to guide CPI back to the 2% target. Macklem expressed concern that fuel profit margins may take time to return to normal levels, which could make overall inflation more persistent. He also revised down the bank's fourth-quarter annualized growth forecast to 0.75%. Macklem warned that if the bank moves too slowly on rate increases, it may be forced to raise rates more aggressively later. He expects inflation to rise slightly in the coming months, and emphasized that the October decision will hinge on updated inflation projections.
Source report
September 22 — Bank of Canada Governor Tiff Macklem stated that the return of fuel profit margins to normal levels may take some time, which is concerning as it could make overall inflation more persistent. He noted that the Bank has revised down its annualized growth forecast for the fourth quarter to 0.75%.
Macklem emphasized that the Bank will focus on inflation forecasts, expecting inflation to rise slightly in the coming months. He highlighted the key question: whether current interest rates are appropriate or whether further rate hikes are needed.
The inflation forecast will influence the Bank's decision in October, as policymakers must determine whether to raise interest rates to guide CPI back to the 2% target. Macklem warned that if rate hikes are implemented too slowly, the Bank may be forced to raise rates very quickly and by a larger magnitude than if action were taken earlier.
Source
财联社Neutral / independent
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