Macklem Warns of Higher Inflation and Uncertainty Ahead

Bank of Canada Governor Tiff Macklem spoke in Halifax and indicated that inflation may increase over the coming months. He stated that 'A new era of uncertainty is not going away any time soon,' which suggests that the current economic landscape is unpredictable.

Macklem also mentioned that the Bank of Canada needs to be prepared for a scenario where rates need to be raised quickly if they were initially too slow to do so, warning that this would result in more drastic measures. The Bank has lowered its Q4 annualized growth forecast to 0.75%.

He emphasized that the key focus will be on inflation forecasts and whether the current rate is sufficient or if a hike is necessary. This comes at a time when fuel margins are still high, which could add persistence to headline inflation.