In Focus

Canadian inflation: The only thing to fear is fear itself

Next week, for the third meeting in a row, the Bank of Canada will pass on further interest rate cuts. Governor Macklem is clearly aware of a growing output gap and a climbing jobless rate, but has hit the pause button on rate cuts out of fear of an acceleration in inflation. After digging through the data and considering some factors that are likely to cap price pressures, our greater fear is that an overblown inflation threat will keep the Bank of Canada from delivering timely interest rate relief to an economy that needs it. Fiscal policy will take time to ramp up

Read more in the detailed report below.