Yen Surges 2% in Minutes With Traders Edgy on Intervention Risk

Available as: PDF Good afternoon. I’m pleased to be here with Senior Deputy Governor Carolyn Rogers to discuss our recent policy announcement and the Bank of Canada’s Monetary Policy Report. In April, we maintained our policy interest rate at 5% and published a revised outlook for the Canadian economy. We had three key messages. First, monetary policy is working. Total consumer price index (CPI) and core inflation have eased further in recent months, and we expect inflation to continue to move closer to the 2% target this year. Second, growth in the economy looks to be picking up. We expect GDP growth to be solid this year and to strengthen further in 2025. Third, as we consider how much longer to hold the policy rate at the current level, we’re looking for evidence that the recent further easing in underlying inflation will be sustained. Before taking your questions, let me take a moment to discuss recent economic data and the outlook for growth and inflation. In Canada, growth stalled in the second half of last year and the economy moved into excess supply. The labour market also cooled from very overheated levels. With employment growing more slowly than the working-age population, the unemployment rate has risen gradually over the last year to 6.1% in March. There are also some signs that wage pressures are beginning to ease. Economic growth is forecast to strengthen in 2024. Strong population growth is increasing consumer demand as well as the supply of workers, and spending by households is forecast to recover through the year. Spending by governments also contributes to growth, and US strength supports Canadian exports. Overall, we forecast GDP growth in Canada of 1.5% this year and about 2% in 2025 and 2026. The strengthening economy will gradually absorb excess supply through 2025 and into 2026. CPI inflation was 2.9% in March, and price increases are now slowing across most major categories. However, shelter cost inflation is still very high and remains the biggest contribution to overall inflation. Looking ahead, we expect core inflation to cont post: BOC'S GOV. MACKLEM: MONETARY POLICY IS WORKING. post: BOC'S GOV. MACKLEM: GROWTH IN THE ECONOMY LOOKS TO BE PICKING UP. post: BOC'S GOV. MACKLEM: WE ARE GETTING CLOSER TO BEING ABLE TO CUT RATES.