BOC Macklem is speaking and says:
- 2026 monetary policy framework renewal should leave 2% inflation target unchanged
- “Now is not the time to question the anchor that has proven so effective,” says Macklem
- BOC’s focus will be on how it can improve the framework and its implementation to best address structural changes
- BOC wants to consider the interaction of monetary policy and housing; does persistently high shelter price inflation distort measures of core inflation?
- If U.S. tariffs are long-lasting and broad-based, there will not be a bounce back
- Updated BOC model shows Canadian output would fall almost 3% over two years if U.S. imposed tariffs, all but wiping out growth forecasts for 2025 and 2026
- Renewal will look at whether BOC needs a richer monetary policy playbook and how to measure underlying inflation
- Model shows that exports would fall 8.5% in the year after tariffs took effect
- In this case, we might eventually regain the current rate of growth, but the level of output would be permanently lower
- Initial impact of tariffs would be a one-time rise in prices; monetary policy must ensure higher prices do not become ongoing inflation
The USDCAD has wandered above the 100 hour MA at 1.4197, but remains below the 200 hour MA at 1.42195. If both are broken, that would increase the bullish bias in the short term. Earlier this week, the 200 hour MA stalled the rally.
Move back below the 100-hour MA would be more bearish.
USDCAD is trying to extend above the 100 hour MA
