Bank of Canada Leans Into Hawkish Path, Dashing Hopes for Pivot

By Theophilos Argitis

2022.10.06

• Macklem says economy is still ‘clearly’ in excess demand
• Two-year yield hits highest since 2007 as rate bets shift

Bank of Canada Governor Tiff Macklem said he remains firmly on an interest-rate hiking path, quashing hopes for an imminent end to a tightening cycle that’s choking indebted households and threatening the economy with recession.

Macklem, in a speech and press conference Thursday, played down a recent slowing of headline inflation, saying underlying price pressures are elevated and risk becoming entrenched without further rate increases.