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Bank of Canada’s Macklem: Rate hikes will limit impact of rising oil prices

Bank of Canada Governor Tiff Macklem said interest rate increases will limit the effects of rising oil prices. The remark addresses how higher borrowing costs may offset the inflationary pressure from costlier crude.

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AI take

Macklem's framing is notable because it treats rate policy as a partial counterweight to an energy shock rather than a bystander to it, which matters for anyone exposed to both borrowing costs and fuel-linked input prices. The practical question is how much of the offset is assumed to come from demand destruction versus currency effects, since neither is spelled out here. Whether this offset proves large enough to keep inflation expectations anchored is the open question.

Generated by AI for reference only.

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