Bank of Canada’s inflation 'buffet' muddies timing of cuts
BNN Bloomberg
The Bank of Canada says it’s watching core inflation closely as it weighs when to cut rates, but a mixed bag of measures gives it options on timing and clouds the outlook for markets and economists.
The central bank has no less than six indexes it monitors to get a grasp on underlying price pressures. Governor Tiff Macklem has pushed back against focus on a specific indicator, describing core inflation as more of a “concept.”
While that reflects the bank’s need for certainty before declaring victory over inflation, it can also limit transparency – there’s no lodestar key to policymakers’ thinking that would compel them to cut.
“The bank can always find a number to suit its narrative,” said Benjamin Tal, deputy chief economist at the Canadian Imperial Bank of Commerce, in an interview.
