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BoC Governor Macklem Says Inflation In Canada Is Not Widespread, So Not That Concerned


Governor of the Bank of Canada, Tiff Macklem

  • supply chain disruptions are likely to be more persistent than expected
  • supply chain challenges mean inflation in Canada and other IMF members will likely take a little longer to come down
  • the concern around the table is that the bottlenecks are not easing as quickly as expected; they seem to be more complicated, more persistent than previously thought
  • disruptions in the global value chain are largely temporary, but there is a risk that some elements of this will be more permanent; which would have a more permanent effect on the supply
  • Supply chain challenges mean short-term economic recovery in Canada will not happen as quickly as the Bank predicted in July
  • so far, the causes of the rise in Canadian inflation have been fairly limited; if they were to expand and maintain, it would be more worrying
  • medium- and long-term inflation expectations remain very strong in Canada and other advanced economies
  • so far we see no evidence of sustained inflation; wage measures have increased a bit but provide no independent source of inflation
  • Canadian labor market slowdown persists, unemployment rate has not returned to pre-pandemic levels
  • Job growth in Canada has been concentrated in areas where it was needed most, such as youth and women

Headlines via Reuters, mine in bold. Macklem doesn’t seem too concerned about inflation, and still sees slack in the job market. It sounds a lot like the RBA! Like the RBA, the Bank of Canada has embarked on a gradual trajectory, but nothing more aggressive than expected so far.

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