Technical Analysis

BoC Gov Maclem says expects policy rate will need to rise further

Bank of Canada Governor Tiff Macklem and Senior Deputy Carolyn Rogers appear before the House of Commons Standing Committee on Finance

We heard from Rogers on Tuesday (local CAD time):

And, the knives are out for the housing sector says Rogers:

  • we need lower house prices to restore balance to housing market

We can expect more of the same from Macklem and Rogers at this testimony.


  • We expect our policy rate will need to rise further
  • How much further policy rates would need to rise will depend on how monetary policy is working to slow demand
  • Inflation in Canada remains high and broad-based, reflecting large increases in both goods and services prices
  • We have yet to see a generalized decline in price pressures
  • Canadian economy is still in excess demand and it’s overheated
  • Higher interest rates are beginning to weigh on growth
  • Effects of higher rates will take time to spread through the economy
  • Expect growth will stall in the next few quarters; once we get through this slowdown, growth will pick up
  • We are trying to balance the risks of under- and over-tightening
  • The tightening phase will come to an end, and we are getting closer, but we are not there yet
  • with inflation so far above our target we are particularly concerned about the upside risks
  • BoC balance sheet peaked in March 2021 at CAD575bn, as of last week it was around CAD 415bn, a drops of around 28%

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button