- Reiterates that the BOC will act forcefully if need be
- Canadian should expect rates to continue to rise towards more neutral settings, current estimate is that is between 2-3%
- If demand responds quickly to higher rates and inflationary pressures moderate, it may be appropriaate to pause hikes once we get closer to the neutral rate
- On the other hand, we may need to take rates modestly above neutral for a period to bring demand and supply back into balance and inflation to target
- Impact of Russia-Ukraine war on Canada is likely to be small
- Businesses indicated they will need to raise wages to attract workers
- Exports are picking up
- We are concerned about the broadening of inflation in Canada
- Canadians should expect rates in a neutral setting, between 2-3%
- We have an inflation target, not an interest rate target
I believe the comment on 'forceful' is a hint another 50 bps hike in June. USD/CAD has slipped on the comments but it comes at the same time as an improvement in the broad risk trade and dip in the US dollar.