Central Banks
Bank of Canada’s Pivot Opens Path for Others to Diverge From Fed
- Macklem pushes back against concerns about weaker loonie
- BMO’s Porter says central banks have ‘safety in numbers’
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Bank of Canada Governor Tiff Macklem led the Group of Seven in lowering interest rates, and his confidence may help reassure other central banks that they can launch into cuts before the Federal Reserve.
Macklem made it clear that Canada’s interest rate policy doesn’t need to move in lockstep with that of its southern neighbor, despite the potential for downward pressure on the loonie. It was a bold signal that divergence in rates isn’t a huge concern for one of the largest US trading partners.