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      Bank of Canada Governor Warns US Tariffs Could Halve Q4 Growth

      Tiff Macklem, the Governor of the Bank of Canada, has indicated that the imposition of new tariffs by the United States could significantly impact Canada's economic growth in the fourth quarter of 2026, potentially reducing it to below 1%. Macklem's comments highlight the challenges facing Canadian policymakers as they navigate the implications of external economic pressures.

      In addition to the potential effects of US tariffs, Macklem noted that if oil prices remain around $100 per barrel, inflation in Canada is likely to rise in the coming months. He pointed out that recent increases in fuel prices have exceeded typical expectations, largely due to damage to global refining capacity. Despite these pressures, he stated that there is currently no evidence suggesting that higher oil prices are affecting the prices of other goods and services.

      The Bank of Canada is cautious about raising interest rates in response to temporary inflationary shocks, particularly given the already weakened growth outlook. Macklem emphasized the need for careful monitoring of inflationary trends, as persistent pressures could necessitate a policy response. He also mentioned that many Canadian businesses are adapting to the new tariff environment, although the growth in the labor force is expected to remain stagnant over the next few years.

      © 2026 KLEA News. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

      Source: KLEA News

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