The watch the BOC Press conference for the monetary policy report for July 2025. The USDCAD is trading at 0.8117.
Q&A begins at 10:41 AM ET:
- Let's hope there is agreement and it is a a good agreement
- It will be hard to have trust.
- There will be a lot of uncertainty.
- One reason we held policy unchanged is seen additiional inflation pickup
- Inflation has gotten our intention.
- A lot of things that are causing an increase in core inflation should unwind
- Canadian dollar has increased which should put downward pressure on inflation.
- We look at where inflation is going to go.
- It is hard to be as forward looking when there is a lot of uncertainty.
- We will continue to support the economy while ensuring that inflation remains under control.
- We will take meeting by meeting approach.
- In the 1st quarter was boosted by surge in exports.
- In the 2nd quarter will see a very sharp decline in exports.
- The 2nd quarter should see a contraction
- When you get in the 3rd quarter we are not seeing as much a move in exports
- On consumption, we continue to see moderate growth going forward.
- Tariffs mean the economy will work less efficiently. There is going to be less income. We will be on a permanently lower path.
- We will assure that tariffs don't become an inflation problem.
- We have a flexible exchange rate which will allow us to gear our monetary policy to the Canadian economy.
Press conference ends at 11:10 AM ET:
SUMMARY: Governor Tiff Macklem emphasized the high degree of uncertainty surrounding trade policy, noting that even if a deal is reached, trust will be difficult to rebuild and volatility will likely persist. This uncertainty is a key reason why the Bank is taking a cautious, meeting-by-meeting approach to monetary policy.
Macklem stated that the decision to hold the policy rate unchanged was influenced by a recent pickup in core inflation, which has “gotten our attention.” However, he expects many of the inflation drivers to unwind over time, and noted that the stronger Canadian dollar should help ease inflationary pressures. The Bank is focused on where inflation is heading, not just where it is today, but acknowledged that looking ahead is harder in such an unpredictable environment.
On the economic outlook, Macklem reiterated that Q1 growth was boosted by a surge in exports, while Q2 is expected to contract sharply due to a reversal in trade. In Q3, exports are not showing much movement, while consumption is expected to grow moderately. He stressed that tariffs will make the economy less efficient, reduce overall income, and place Canada on a permanently lower growth path. Still, the Bank is committed to ensuring tariffs do not fuel persistent inflation, and will continue using Canada’s flexible exchange rate to tailor monetary policy to domestic conditions.
