We dissect the Bank of Canada’s decision to hold its key interest rate steady at 4.5%. Inflation is gradually coming down, the economy is still growing modestly, the labour market is strong. But Governor Tiff Macklem made clear that the job of bringing inflation down to the target rate isn’t done yet, and warned he’s willing to raise interest rates again if necessary to get there. Scotiabank Chief Economist Jean-François Perrault returns to the podcast to explain the Bank’s announcement, assess the current economic situation, and look ahead to what we can expect on the recession and interest rate fronts. (Spoiler alert: He says rates will eventually come down, but probably not this year.)  

Key moments this episode: 

1:03 — The big takeaway from the announcement today 

1:26 — What is the Bank of Canada trying to signal? 

2:59 — What can we expect in the months ahead? 

4:38 — Is Macklem signalling that there won’t be rate cuts anytime soon? 

5:22 — What about a potential recession? 

7:03 — If there is a recession, will it be a soft landing? 

7:54 — Where do we go from here in terms of inflation?