Macklem's Warning: Inflation to Persist Amid High Oil Prices and Tariffs

Bank of Canada Governor Tiff Macklem is warning that elevated inflation will persist, driven by high oil prices and renewed U.S. tariffs. With headline inflation near 3% in recent months, Canadians can expect tight budgets for a while longer.

Macklem pointed to the potential impact of $100-per-barrel crude oil on Canada's fourth-quarter growth, which could be cut below 1%. He also noted that new U.S. tariffs will eventually work their way into consumer prices.

The Bank of Canada is prepared to hold rates higher for longer rather than risk letting inflation expectations spiral. This has prompted investors to look for stocks with pricing power or those benefiting from higher energy prices.

Three TSX stocks worth watching are Royal Bank of Canada (TSX: RY), Canadian Natural Resources (TSX: CNQ), and Agnico Eagle Mines (TSX: AEM). RBC's diversified business model gives it multiple growth avenues, while CNQ benefits directly from higher oil prices. Agnico Eagle offers a classic hedge against inflation with its gold production.