Bank of Canada Governor Tiff Macklem told reporters on Friday that he expects a large consumer price index (CPI) reading when Statistics Canada publishes inflation data on Monday, but that he anticipates the headline inflation rate will still register below 3%.
Macklem delivered the remarks in a media callback after attending meetings at the International Monetary Fund in Washington. He framed the upcoming inflation print as significant in size, while reiterating his expectation that the overall headline rate will remain under the 3% threshold.
Addressing how monetary authorities are likely to respond to recent price developments, Macklem emphasized that central banks do not all face the same conditions. "Central banks around the world are positioned differently regarding economic slack and inflation," he said, and he warned that responses to the oil price shock are likely to vary across jurisdictions.
"We’re all feeling like you don’t want to jump too early and raise interest rates and lower growth, particularly when growth is pretty weak," Macklem said. "On the other hand, you don’t want to be late and let inflation get entrenched."
Those remarks underscore the trade-offs monetary authorities face between avoiding premature tightening that could sap weak growth and delaying action long enough for inflation to become persistent. Macklem’s comments frame the upcoming CPI release as an important data point for assessing this balance.
In addition to discussing inflation and policymaking nuances, Macklem said he had spoken with Federal Reserve Chair Jerome Powell about Anthropic PBC’s Mythos artificial-intelligence model. He did not provide further detail in the remarks reported on Friday.
The governor’s comments tie together expectations for Canada’s imminent inflation reading, the differing starting points confronting global central banks, and the broader policy dilemma posed by an oil price shock that can alter inflation dynamics. Market participants and policymakers will be watching Monday’s data release for clarity on the near-term inflation trajectory and potential implications for monetary policy deliberations.