BOC Macklem is speaking and says:
- In the future, the world is set to be more prone to shocks than we would all like.
- Big structural changes are already underway, such as deglobalization, demographic shifts, digitalization, and decarbonization.
- We need to work with our international partners to try and shape the future.
- We also need to improve our analysis and ensure our monetary policy framework is fit for purpose.
- Combination of higher sovereign debt, higher long-term interest rates, and lower economic growth is making the world more vulnerable.
- There are risks around our inflation outlook; we are equally concerned with inflation coming in higher or lower than expected.
- Elevated wage increases combined with weak productivity could boost inflation as businesses look to pass on higher costs.
- The economy could continue to grow below its potential, which would pull inflation down.
- When we use extraordinary tools to tackle a crisis, we need to be clear about what we’re trying to achieve with those tools and under what conditions they’ll no longer be needed.
- The bar to use exceptional tools has always been high in Canada, and it should remain high.
Overall, Macklem balanced out his comments and certainly on inflation.
Looking at the USDCAD, the price reached above the April 19 high at 1.4264 to a high at 1.4270
This article was written by Greg Michalowski at www.forexlive.com. Source