RSM chief economist Joe Brusuelas said the BOC should be cautious adjusting
forward guidance on the rate path. While the BOC targets 2% inflation,
energy-driven CPI could top 3%. GDP contracted for two consecutive quarters and
declined in three of the past four. Brusuelas said the BOC will seek a balance
at Wednesday’s decision and Governor Macklem’s press conference—despite weak
growth the policy outlook could at some point require rate hikes. If the
energy-price shock persists, the BOC may need to hike this fall.
