Canada

Research evidence excerpt

Canada

pril, the strongest monthly gain since last sum-the need to vanquish forward guidance, although Macklem

mer. With StatCan’s advance estimate pointing to furtherseemed perhaps the least enthused to jump on this bandwag-

0.1% growth in May, even flat output in June would put 2Qon. Nonetheless, there was recognition that Canada and the

real GDP on track to expand at a bit above a 2%ar pace.UK faced less urgency to tighten policy given their weak

economies. Macklem arguably sounded the least hawkish of

Although the “technical recession” of 4Q25 and 1Q26 wasthe bunch—although the lack of any substantive comments

shallow and was never likely to persist, the economy remainsby Fed Chair Warsh leaves his desired policy stance unclear.

weak—as the Governing Council acknowledged in last

week’s Summary of Deliberations. Specifically, while theMacklem also highlighted financial stability risks at Sintra,

energy sector has benefited from rising global prices and con-emphasizing themes from a speech he gave last week. His

tinued US and global demand, and the information technolo-concerns were broadly echoed by BoE Governor Bailey and

gy sector is expanding in the shadow of similarly strongECB President Lagarde, whereas Warsh did not engage on the

growth in the US, the trade war continues to weigh heavily ontopic. But it was apparent that there is a widening gap

industrial production, and specifically the manufacturing sec-between the US and a number of other DM economies over

tor (Figure 2). This drag is unlikely to fade anytime soon giv-what is seen as appropriate financial regulatory oversight,

en the uncertainty engendered by the US formally announcingparticularly as the Fed and other US agencies are moving