BOC’s Macklem: If CAD appreciation persists, we’ll have more work to do on rates

• There was broad consensus at the IMF meetings that inflation is the most-immediate threat to current and future prosperity
• We will be ‘watching closely’ US economy, inflation and rates and factoring that in as we take decisions in Canada
• Whatever Sept CPI shows, economy will still be in excess demand. Labour markets are tight and inflation is too high
• There was a clear resolve to restore price stability at IMF

The market is pricing in a 78% chance of 50 bps from the BOC on October 26 with the remainder at 75 bps.