Bank of Canada’s Macklem: Inflation Expectations Reflect Fuel Cost Pass-Through

Macklem's framing puts fuel-cost pass-through at the center of the inflation-expectations question, which matters because expectations are the channel through which a single energy shock can become persistent rather than transitory. For rate-sensitive sectors, including tokenized treasury and real-yield products that trade off central-bank credibility, the signal is that policy attention is on second-round effects, not just headline energy moves. The open question is whether the Bank treats this pass-through as contained or as evidence that expectations are drifting — a distinction that shapes the tone of its next communication.