The USDCAD is tradin at 1.3711 at the start of the USDCAD

BOC Macklem:

  • Interest rate decisions one meeting at a time. If the economy continues as expected and easing of inflation, you can expect more cuts
  • Determined to get inflation back to 2% target
  • The work is not done. See how things evolve.
  • Will make decisions one meeting at a time depending on data
  • We have come a long way with fight on inflation
  • Economy has evolved broadly as we expected. That has increased our confidence that inflation will move gradually back toward a 2% target
  • The timing of any further cuts is dependent on incoming data.
  • We know there can be bumps along the way. There are risks.
  • Our own forecasts has inflation moving gradually back toward our 2% target.
  • There are limits to how far we can divert from us, and we are not close to those limits
  • We are expecting population growth to slow. We have built in our forecasts. Population growth has eased employment pressures, but it also increase demand for housing.
  • So far it is looking like a soft landing for the economy
  • There is room for economy to grow faster than potential for a period..
  • We are normalizing our balance sheet, but our policy is still restrictive.
  • We need restrictive policy as inflation is still above target.
  • We will get to a point where balance sheet is normalized
  • Interest rate will notreturn to levels as low as they were before the Covid pandemic.
  • In the past there have been periods of considerable diversions with the Fed

BOC Carolyn Rogers:

  • It is clear there is some pent-up demand in the housing market. We'll see how that goes.
  • We always look on how decisions will impact Canadians and housing is an important part.
  • The BOC is diverging from other countries because each economy is working at a bit differently

The press conference concludes at 11:08 AM ET.

Summary of the press conference:

Bank of Canada Governor Tiff Macklem emphasized that interest rate decisions will be made on a meeting-by-meeting basis, depending on economic data. If the economy and inflation continue to align with expectations, more rate cuts are likely. While progress has been made in combating inflation, aiming to bring it back to the 2% target, the work is not yet done.

The timing of further cuts will depend on incoming data, acknowledging potential risks and bumps along the way. Despite some limits on diverging from U.S. policy, the BoC forecasts gradual inflation reduction toward the target.

Population growth, which has eased employment pressures but increased housing demand, is expected to slow. The economy appears to be heading for a soft landing, with room for growth beyond potential for a period. Although the BoC is normalizing its balance sheet, the policy remains restrictive as inflation is still above target. Interest rates are not expected to return to pre-pandemic lows, and historically, there have been significant divergences with the Federal Reserve.