Bank of Canada Governor Tiff Macklem warns of persistent inflation pressures as oil nears $100

Canada’s top central banker just told markets to brace for a tricky stretch. Tiff Macklem, Governor of the Bank of Canada, warned that elevated energy prices are adding persistence to headline inflation, a development that complicates an already delicate balancing act between fighting price pressures and protecting a slowing economy. The comments land at a moment when oil prices have crept toward US$100 per barrel, shipping disruptions continue to ripple through supply chains, and renewed trade tensions with the United States threaten to chop fourth-quarter GDP growth roughly in half. The policy rate sits at 2.25%, and Macklem made clear the Bank is prepared to move it higher if inflation refuses to cooperate. The inflation picture Canada’s Consumer Price Index is running at approximately 3%, a full percentage point above the Bank’s 2% target. The primary culprit is energy. Oil approaching the $100 mark has pushed fuel and heating costs higher across the country, while compromised refining capacity and shipping bottlenecks have made it harder for supply to catch up with demand. The Bank has so far been able to “look through” the initial impact of energy shocks, treating them as tem...