BoC's Macklem
BoC's Macklem
  • Higher long-term bond yields are not a substitute for down what needs to be done to get inflation back down to target

Macklem is more-hawkish than the Fed with this comment. BOC will be releasing economic projections on October 25 and he said "we're not going to be forecasting a serious recession"

  • We are seeing clear signs mon pol is working to rebalance supply and demand but inflation is still too high
  • We're not really seeing downward momentum in underlying inflation and that is a concern
  • Strength of Canadian economy means people are getting wage increases that will help make it easier to digest impact of higher mortgage rates after renewal

This is hawkish stuff and it strikes me as out of touch with what's happening in the Canadian housing market. There is a tidal wave of pain coming to Canada in 2024 and I'm not sure that Macklem is the guy to cope with it. I disagree completely with the further 25 bps rate hike that's priced into Canadian OIS in March.