Below are some key quotes from a news conference by Bank of Canada Governor Tiff Macklem and Senior Deputy Governor Carolyn Rogers on Wednesday after the central bank held its key policy rate steady at 2.75%.
MACKLEM ON 2% INFLATION TARGET
"Our target is 2% inflation. We think about that symmetrically. We're just as worried about inflation being above 2% as below 2%, so yes we're very focused on assessing both those downward pressures on inflation and the upward pressures that the tariffs and higher costs will mean for future inflation."
MACKLEM ON USE OF THE WORD 'DECISIVELY'
"I would not over-rotate on the word 'decisively.' It's not a code word for anything. Really, in using the word 'decisively,' I was really trying to convey how we're thinking about monetary policy through this period of uncertainty. So the point is that right now, the outlook is really clouded, and so we're being less forward-looking than normal. We're navigating carefully."
MACKLEM ON GOING BACK TO BASE-CASE PROJECTION
"If the situation becomes clearer, we can become more forward-looking. We can, as we usually do, go back to having a base case economic projection, and then the focus of our monetary policy deliberations will be more about, what's the best monetary policy given that base-case projection?"
MACKLEM ON BEING FLEXIBLE AND ADAPTABLE
"The message here is, we have got to be flexible and adaptable and I was really trying to convey how we're thinking this through."
ROGERS ON STRUCTURAL READING
"It's premature to read anything structural into what we're seeing, get ahead of ourselves."
ROGERS ON DYSFUNCTION
"We didn't see dysfunction in the markets. The markets seem to have absorbed what was happening without dislocation. ... We saw what you would expect to see when you see that kind of abrupt policy shift happen."
ROGERS ON CANADIAN FINANCIAL INSTITUTIONS
"Our financial system is entering this in a good place where financial institutions are well capitalized. They have some room to absorb this kind of volatility. But we'll definitely be watching for signs that short-term volatility is starting to affect stability."
MACKLEM ON CONSIDERATION OF TWO POLICY RATE OPTIONS
"We did, very much like we did last time actually, really consider two options. One was hold, to keep the rate unchanged where it is and the second, cut by 25 basis points. You know, last time when we deliberated in the end, we decided to cut. Having cut and with really not much further clarity on what's going to happen with U.S. tariffs, we decided to keep the rate unchanged this time and wait for more information on U.S. tariffs, while we also assess the effects of what we're seeing in the economy of the uncertainty and of the U.S. tariffs."
ROGERS ON SOME COUNCIL MEMBERS BEING MORE OPTIMISTIC
"Some of us are, I would say, more optimistic that the effects (of U.S. trade policy) won't be really, really big, and we won't see that really big upward pressure on inflation, and then there's the effects on growth. So I mean, I think that's where a lot of the discussion centered this time. It's really hard to have a lot of conviction on either of those two layers of risk right now, but after some really good deliberation and taking in everybody's views, there was real clear consensus on a hold being the right decision."
