Macklem Warns of Trade Uncertainty's Impact on Canadian Economy

Bank of Canada Governor Tiff Macklem warned that the uncertainty surrounding US trade policy could hinder recent economic progress in Canada. In prepared remarks for a speech in Halifax, Macklem stated that the changing trade picture may cause businesses to delay investment and hiring decisions.

Macklem noted that if new US tariffs remain in place, the rate of growth for the Canadian economy could be roughly halved in the fourth quarter to below one percent. This warning comes as global oil prices continue to rise due to the ongoing conflict in the Middle East.

Macklem also stated that if oil prices stay near $100 per barrel, the central bank would expect inflation to edge up in the coming months. The bank has been looking through the direct impact of higher oil prices on inflation so far, but Macklem noted that the risk that it becomes more persistent has increased.