Macklem Q&A: Movement in the Canadian dollar hasn’t constrained us so far

• The movement in the Canadian dollar hasn’t constrained us so far
• The depreciation in the loonie so far has been more-driven by trade uncertainty
• Depreciation will stat to have some impacts
• The bar for using quantitative easing is high and should remain very high, we are a long way from that
• There is no doubt that the threat of tariffs weighed on our decision
• The scenario of a 2.5% recession is “a pretty severe scenario”
• That scenario would be 25% US tariffs on every country and 25% retaliation from everyone

The reporters continually asking about tariffs and those impacts (which are impossible to predict) but failed to ask about the path of rates if there no tariffs (which are much easier to predict). However the market may be coming around to the idea that the Bank of Canada could go on pause if there are no tariffs, because there were some hints about that in the opening statement.

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