SECURITY: US State Dept Team Arrives In Venezuela

• +20,000 SFRF6 96.50 calls from 3.5-3.75 ref 96.415

Through the Q&A, Gov Macklem continues to portray the Bank's economic outlook as largely unchanged since the October meeting, though there have been acknowledgements throughout today's communications that the economy is on more solid ground than they had expected. 

• Macklem says that the upside surprise to GDP growth in Q3 and the upward revisions to prior years don't alter the Bank's outlook that there is still a negative output gap, however the gap may be smaller than was estimated in the October Monetary Policy Report (which saw the gap as being closed by end-2026):
• "The recent data, as we've discussed, is showing some improvement, and that is welcome news, but it has not changed our view that the economy is still in excess supply and we continue to expect modest growth going forward...mechanically [the 2.6% GDP growth in Q3 vs 0.5% projected in the MPR] means the output gap is smaller...we still see that slack being taken up pretty slowly."
• Replying to questions from MNI's Greg Quinn, Macklem says that while the Bank had tariff scenarios that included a recession, "at the end of the year, as we get to the end of the year, the R word people are talking about is resilience."

• BOC SAYS ECONOMY SHOWING RESILIENCE NOT RECESSION AT YEAR END