US Consumer Inflation Hits Fresh Three-Year High In May<\/a><\/p>\nGrowth should return to positive in the second quarter of the year, the Bank of Canada said, while cautioning that challenges remain amid continued uncertainty over US President Donald Trump\u2019s trade policies.<\/p>\n
\u201cRecession is not a word I would use,\u201d Bank of Canada Governor Tiff Macklem told reporters.<\/p>\n
\u201cI would describe the economy as weak. It hasn\u2019t really grown in the past year,\u201d he said, stressing that the cloudy outlook for US trade policy has impacted business investment in Canada.<\/p>\n
Both the United States and Canada have predicted that substantial parts of the existing North American free trade deal (USMCA) will be preserved when ongoing negotiations wrap up.<\/p>\n
But Trump\u2019s existing tariffs on auto, steel, aluminium and lumber are causing damage in Canada, and any new levies will bring further pain.<\/p>\n
The United States, Canada and Mexico have all indicated negotiations on a revised deal will stretch on for months.<\/p>\n
\u201cThat uncertainty will continue to weigh on the economy,\u201d Macklem said, while underscoring that regardless of the outcome from the talks, Canadians understand that relations with the United States will stay volatile.<\/p>\n
\u201cEven with (a) deal, I don\u2019t think you can be certain about anything,\u201d Macklem said.<\/p>\n
No resolution \u2018In Sight\u2019<\/p>\n
The bank further warned that four months of conflict in the Middle East had caused higher energy prices and global supply chain disruptions that \u201care weighing on global economic growth and pushing up inflation\u201d.<\/p>\n
It reiterated that it would not raise rates to confront energy price inflation unless it believed cost increases were bleeding into other parts of the economy.<\/p>\n
\u201cSo far, there has been limited evidence of broad-based pass-through of higher energy prices to other consumer prices,\u201d the central bank said.<\/p>\n
Macklem stressed that Canadian inflation had been contained at the bank\u2019s desired target of roughly two per cent before the conflict began but was now edging closer to three\u00a0 per cent.<\/p>\n
That sudden uptick in inflation was forcing the bank to weigh two conflicting realities: a struggling economy that may need lower rates to boost growth, alongside rising inflation that may warrant rate hikes.<\/p>\n
The duration of Middle East hostilities remains crucial, Macklem said.<\/p>\n
\u201cThere\u2019s no clear resolution in sight. We don\u2019t know what that resolution would look like.\u201d<\/p>\n
AFP<\/p>\n","protected":false},"excerpt":{"rendered":"Canada\u2019s central bank held its key lending rate at 2.25 per cent on Wednesday, warning the G7 economy…\n","protected":false},"author":2,"featured_media":82513,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[10777,17,32398],"class_list":["post-82512","post","type-post","status-publish","format-standard","has-post-thumbnail","category-canada","tag-bank","tag-canada","tag-rate"],"_links":{"self":[{"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/posts\/82512","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/comments?post=82512"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/posts\/82512\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/media\/82513"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/media?parent=82512"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/categories?post=82512"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/tags?post=82512"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}