Bank of Canada's Macklem Set to Strike Cautious Monetary Policy Tone, Nomura Says
Bank of Canada Governor Tiff Macklem is expected to strike a cautious tone at Wednesday's policy meeting, weighing persistent risks to growth against potential upside to inflation, according to Nomura Global Markets Research. "That dilemma persists, and the overall outlook has not changed materially" since June's policy meeting, Nomura's Ruchir Sharma wrote in a note made available on Monday. Macklem previously said inflation risks had eased after the U.S.-Iran ceasefire, but renewed tensions between may prompt the BoC to remain cautious, said Nomura. With risks still balanced, the governor is likely to reaffirm that policy is well-positioned and responsive to evolving conditions. The BoC policy statement is due out at 9:45 a.m. ET Wednesday, followed shortly after by a press conference with Macklem. Nomura expects the central bank to keep the policy rate on hold at 2.25%, in line with the market consensus. The governor is unlikely to signal the next policy move at the press conference, instead emphasizing uncertainty, flexibility and the BoC's readiness to respond to evolving economic conditions, added the bank. Investors will focus on Macklem's views on forward guidance.
Bank of Canada Governor Tiff Macklem is expected to strike a cautious tone at Wednesday's policy meeting, weighing persistent risks to growth against potential upside to inflation, according to Nomura Global Markets Research. "That dilemma persists, and the overall outlook has not changed materially" since June's policy meeting, Nomura's Ruchir Sharma wrote in a note made available on Monday.
Macklem previously said inflation risks had eased after the U.S.-Iran ceasefire, but renewed tensions between may prompt the BoC to remain cautious, said Nomura.
With risks still balanced, the governor is likely to reaffirm that policy is well-positioned and responsive to evolving conditions.
The BoC policy statement is due out at 9:45 a.m.
ET Wednesday, followed shortly after by a press conference with Macklem.
Nomura expects the central bank to keep the policy rate on hold at 2.25%, in line with the market consensus.
The governor is unlikely to signal the next policy move at the press conference, instead emphasizing uncertainty, flexibility and the BoC's readiness to respond to evolving economic conditions, added the bank.
Investors will focus on Macklem's views on forward guidance.