ICYMI – BoC Gov Macklem warns CAD budget fiscal spend could slow reaching inflation target

<p>Bank of Canada Governor Macklem appeared in parliament on Thursday, addressing questions from a House of Commons committe</p><p>Macklem was blunt with the big spenders (pps. this is not a political criticism, all parliamentarians are the same):</p><ul><li>said government should avoid major spending increases in the next federal budget so they do not hinder the central bank's efforts to bring down stubborn inflation</li></ul><p>(CAD budget is expected in March or April)</p><ul><li>if spending in the federal budget stimulates demand, it would be "particularly problematic" </li><li>said unexpected developments, such as a sudden supply chain blockage, could still force the central bank to raise interest rates again</li><li>BoC is right now focused on when it should start lowering rates, wants to see price pressures easing and clear downward momentum in underlying inflation first</li></ul><p>USD/CAD is circa 1.3380 having fallen during the Thursday North American session alongside broader USD weakness.</p>

This article was written by Eamonn Sheridan at www.forexlive.com.