MNI BRIEF: BOC Says Economy Is Between Its Two Trade Scenarios

Bank of Canada Governor Tiff Macklem told reporters Wednesday the economy remains somewhere between the two scenarios officials laid out in April around the the intensity of the U.S. trade war, and the recent climb in core inflation has his attention.

“U.S. trade policy continues to be very unpredictable,” Macklem said after holding the policy rate at 2.75% for a second meeting after seven prior cuts. “It’s still a moving target. We’re still somewhere between the two scenarios.”

On another question about a rise in measures of core inflation he said it “does make you think that underlying inflation could be a little bit firmer than we thought, so that is something that we will be watching.” Asked if dropping a phrase about being prepared to act decisively if needed he said “I wouldn’t over rotate on what was there last time.” (See: MNI INTERVIEW: Dodge Sees BOC Cutting To Low End Of Neutral)