Bank of Canada Governor Tiff Macklem said on Wednesday that the significant amount of slack that was in the Canadian economy is now substantially diminished, according to Reuters. Earlier in the session, Macklem spoke about the longer-term outlook for BoC policy.

He said that lower neutral interest rates mean we are likely going to need exceptional forward guidance and QE more often and, with interest rates lower across the globe, the bank is likely to lower its policy rate to the effective lower bound (i.e. just above zero) more frequently in response to shocks.  

Market Reaction

CAD has not seen a reaction to Macklem's latest remarks.