BOC's Macklem: We are not expecting a recession

<ul><li>Higher long-term bond yields are not a substitute for down what needs to be done to get inflation back down to target</li></ul><p>Macklem is more-hawkish than the Fed with this comment. BOC will be releasing economic projections on October 25 and he said "we're not going to be forecasting a serious recession"</p><ul><li>We are seeing clear signs mon pol is working to rebalance supply and demand but inflation is still too high</li><li>We're not really seeing downward momentum in underlying inflation and that is a concern</li><li>Strength of Canadian economy means people are getting wage increases that will help make it easier to digest impact of higher mortgage rates after renewal</li></ul><p>This is hawkish stuff and it strikes me as out of touch with what's happening in the Canadian housing market. There is a tidal wave of pain coming to Canada in 2024 and I'm not sure that Macklem is the guy to cope with it. I disagree completely with the further 25 bps rate hike that's priced into Canadian OIS in March.</p>

This article was written by Adam Button at www.forexlive.com.