Bank of Canada's Macklem Warns of Persistent Uncertainty, Cuts Growth Forecast

Bank of Canada Governor Tiff Macklem said the current period of heightened uncertainty is unlikely to fade soon, as he outlined a weaker growth outlook and lingering inflation risks.

Speaking at a press conference, Macklem said the central bank has lowered its annualized growth forecast for the fourth quarter to 0.75%. He also expects inflation to edge higher in the coming months.

A key concern, he noted, is that elevated fuel margins could take time to return to normal. That delay matters because it would add persistence to headline inflation, he said.

Macklem indicated that the central bank's inflation forecast will be the main factor guiding its next decisions. The central question, he said, is whether the current policy rate is appropriate or whether an increase is needed.

He cautioned that waiting too long to raise rates could force the central bank to act more aggressively later. Moving too slowly, he explained, would mean having to raise rates very quickly and by more than if action had been taken earlier.

The press conference concluded after his remarks.