Bank of Canada Cautions Canadians: Tiff Macklem, Governor of the Bank of Canada, has indicated that Canada is at risk for sudden difficulty in its economy. According to Macklem, the global economic environment seems much less predictable and therefore everybody is more uncertain about what happens next.
Macklem says global tensions and U.S. trade threats are creating big risks. He believes these problems could hit Canada’s economy when people least expect it.
“There is a real chance of a new shock,” Macklem said. “Things around the world are more risky right now.”
U.S. Trade Threats Make Canada’s Future Uncertain
One of the biggest worries comes from the United States. Former President Donald Trump has made several strong threats, including new tariffs on Canadian goods. He even warned of a huge tariff if Canada moves forward with a trade deal with China.
Macklem says these threats make Canada’s economic forecast weaker than before. While the Bank of Canada still expects slow growth in the coming years, he admits many things could go wrong.
“There are more chances for this forecast to break,” he said. “It feels more fragile.”
Because of all this uncertainty, the Bank of Canada decided to keep interest rates the same for now.
Global Worries Grow Around the U.S. Economy
Macklem also spoke about concerns surrounding the U.S. Federal Reserve. He recently talked with Fed Chair Jerome Powell and told him he was handling a tough situation well.
Many world leaders are worried after attacks on the Fed’s independence. Macklem says a strong and stable U.S. economy is important for Canada too.
He added that investors around the world are starting to feel nervous. While they still invest in U.S. stocks, they are protecting themselves from currency risk, which has weakened the U.S. dollar.
“The world wants stability,” Macklem said. “Unpredictable policies hurt everyone.”
Do you think rising global tensions and U.S. trade threats could seriously hurt Canada’s economy? Share your thoughts in the comments below.
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