Macklem Eyes Long-Term CPI Expectations for Rate Guidance Amid Sub-3% Forecast

Bank of Canada Governor Tiff Macklem said officials will track medium- and longer-term CPI expectations when deciding on rates, expecting March inflation to accelerate but stay below 3%. Earlier comments flagged a large sub-3% CPI print due Monday from Statistics Canada, signaling disinflation progress toward 2% despite shelter costs and oil shocks from Iran conflict. After 475 bps of hikes to 5%, markets boosted mid-2024 cut odds, weighing on CAD and lifting US Dollar vs Canadian Dollar amid falling bond yields.