Bank of Canada’s Macklem said:
- At first glance, the federal budget does not really change the fiscal trajectory since the 2023 fall economic statement.
- The budget contains spending measures and new taxes; the federal government’s commitment to sticking to fiscal safeguards is useful
- Reiterates that bank will look for evidence that recent downward inflation dynamics are sustainable
- Canadian inflation continues to become less widespread; things are moving in the right direction
- Overall, we believe the downside risks to the inflation outlook are lower than previously.
- There are some signs of strain in household finances, mainly among non-mortgage holders; unpaid debts have increased but are not reaching alarming levels
- Geopolitical tensions are a source of deep concern within the international community
- If there is an increase in oil prices, we will have to take this into account.
This article was written by Greg Michalowski at www.forexlive.com.
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