Macklem press conference: We will take our next decision in December

Macklem’s opening statement was pre-released, these are the highs of the Q&A with the media:

• Core inflation is easing as expected
• Our growth forecast hasn’t changed a great deal
• We’re going to be particularly focused on inflation and growth data
• There was a ‘clear consensus’ on cutting 50 bps today
• Expect there will be further cuts if things unfold as we expect
• Canadian can breathe a sigh of relief
• We’re coming out the other side, our focus now is on sticking the landing
• With inflation close to 2%, Canadians don’t need to worry about increasing costs of living

USD/CAD was trading at 1.3858 as the press conference began, up 40 pips. I believe that with rosy forecasts and no commitments to getting to neutral quicker, the BOC is falling further behind the curve despite a larger cut. The BOC should be at neutral now.

OIS pricing for a December 50 bps cut is at just 7%.

This is a ‘sad’ chart from National Bank.

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