Uneven economic growth in countries around the world may lead to varying interest rate adjustments in the coming months, according to Bank of Canada governor Tiff Macklem. Speaking at the International Monetary Fund meetings in Washington, Macklem emphasized that the timing of interest rate changes should not be mistaken for differences in objectives among central banks.
Macklem noted that while progress has been made in curbing inflation, each country may have a unique approach to achieving their goals. He pointed to the recent economic growth and inflation numbers in the United States as an example of the varying conditions that central banks are facing.
Despite the differences in economic performance, Macklem expressed confidence in the markets’ ability to adjust to these changes smoothly. He highlighted the role of flexible exchange rates in absorbing any discrepancies and ensuring market stability.
On the geopolitical front, Macklem acknowledged the high tensions in the Middle East and the resulting oil price volatility. He emphasized the need to monitor these developments closely, as any spike in oil prices could impact inflation and monetary policy decisions.
In Canada, Macklem stated that the central bank remains focused on controlling inflation and will continue to assess the risks to ensure that progress made in taming inflation is not undone. He emphasized the importance of monitoring upside risks and staying vigilant in the face of uncertainty.
Overall, Macklem’s remarks underscore the complex and interconnected nature of the global economy, where central banks must navigate varying economic conditions to achieve their policy objectives.