Wall Street Journal: Bank of Canada Attempts to Temper Excitement About Economy

Karl Schamotta, chief market strategist at foreign-exchange firm Corpay, said expectations for rate increases in late 2026 pose a hurdle for Macklem because it could translate into tighter financial conditions, adding to the headwinds Canada already faces. Schamotta said Macklem on Wednesday signaled unease that the strong job gains of the past three months can be maintained; discounted solid third-quarter growth because of trade-data volatility; and indicated spare capacity would help offset upward price pressures emanating from U.S. tariffs. “Policymakers are wary of endorsing a premature and unwarranted rise in short-term rates and could step up their jawboning efforts in upcoming appearances if markets fail to heed the message,” Schamotta said.

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