'Macklem is in a tough spot:' What economists think the Bank of Canada will do today

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Canada\u0027s economy is still charging ahead, creating a challenge for the Bank of Canada and its interest rate. Here\u0027s what the economists say

“Macklem is in a tough spot, and must navigate global banking stress while acknowledging sticky price pressures and a hotter-than-expected domestic economy,” Dominique Lapointe, director of macro strategy at Manulife Investment Management, said by email. “The Bank of Canada will hold again, but recent data will keep them hawkish.”

The most important is that inflation, while still far above the bank’s 2 per cent target, is cooling and appears to be on a path to be closer to 3 per cent by midyear, in line with forecasts.Article content This week’s release will include updated forecasts in a new monetary policy report that will factor in expanded fiscal support from Prime Minister Justin Trudeau’s government, which laid out its spending plans last month. It’s also an opportunity for the Bank of Canada to try to address the impact of weaknesses in the global banking system.Article content

In effect, Macklem can point to international concerns as a reason to stay on the sidelines, even though the domestic economy looks stronger than expected.

 

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