We are looking for a continued reduction in inflation to 2%

Bank of Canada (BoC) Governor Tiff Macklem noted Tuesday morning that the BoC will continue to closely monitor consumer conditions in Canada, reiterating that the timing and pace of BoC rate cuts will depend on data.

Key highlights

Given the continued progress we have seen on inflation, it is reasonable to expect further cuts in our policy rate.

We will also look for continued easing in core inflation, which is still just above 2%.

The Bank of Canada is happy to see 2% inflation, now we have to keep the landing.

The timing and pace will be determined by incoming data and our assessment of what that data means for future inflation.

The bank is scaling back its retail central bank digital currency business, shifting its focus to broader payments system research and policy development.

There is a notable increase in financial stress among non-mortgage borrowers, mainly renters.

We’ll be keeping a close eye on consumer spending as well as business hiring and investment.

I am concerned about the growing share of non-mortgage borrowers who have a credit card balance of at least 90% of their credit limit.