Macklem: Our relationship with US has fundamentally changed

BESSENT SAYS US 'ABSOLUTELY NOT' INTERVENING IN DOLLAR-YEN BREAKING: US Treasury Secretary Bessent on the dollar: The US always has a strong dollar policy. Strong dollar means setting right fundamentals. BESSENT SAYS TODAY'S RATE DECISION IS 'UP TO' THE FED BESSENT SAYS HAD LONG DISCUSSION ON PLANE WITH TRUMP ON FED CHAIR BESSENT SAYS HAVE 4 GREAT CANDIDATES FOR FED CHAIR

Available indicators suggest that economic activity has been expanding at a solid pace. Job gains have remained low, and the unemployment rate has shown some signs of stabilization. Inflation remains somewhat elevated. The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. Uncertainty about the economic outlook remains elevated. The Committee is attentive to the risks to both sides of its dual mandate. In support of its goals, the Committee decided to maintain the target range for the federal funds rate at 3‑1/2 to 3‑3/4 percent. In considering the extent and timing of additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks. The Committee is strongly committed to supporting maximum employment and returning inflation to its 2 percent objective. In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee's goals. The Committee's assessments will take into account a wide range of information, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments. Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Michael S. Barr; Michelle W. Bowman; Lisa D. Cook; Beth M. Hammack; Philip N. Jefferson; Neel Kashkari; Lorie K. Logan; and Anna Paulson. Voting against this action were Stephen I. Miran and Christopher J. Waller, who preferred to lower the target range for the federal funds rate by 1/4 percentage point at this meeting. FOMC STATEMENT COMPARE pic.twitter.com/zK9gGdjOKS *FED SAYS GOVERNORS WALLER, MIRAN DISSENT IN FAVOR OF 25 BPS CUT *FED: UNEMPLOYMENT RATE HAS SHOWN SOME SIGNS OF STABILIZATION

US tariffs and the unpredictability of future trade arrangements are disrupting the Canadian economy. Growth in Canada is expected to remain modest, while inflation stays close to 2%. The Canadian economic outlook is little changed since the October Report. Canada continues to adjust to a new trade landscape. Affected businesses are reconfiguring their trade and seeking new suppliers and markets. As this adjustment proceeds, capital will start being reallocated and some workers will shift into new roles. This adjustment will take time, and growth will be restrained through the transition. Uncertainty remains high. The world is becoming more fragmented, and geopolitical risks are elevated. For Canada, the future of trade in North America is an important uncertainty (see In Focus: The review of the Canada-United States-Mexico Agreement). Summary of economic conditions The Canadian economy continues to evolve much as expected, although quarterly growth patterns have been quite volatile. Much of this volatility has been driven by large swings in trade and inventories. After expanding rapidly in the third quarter of 2025, growth likely stalled in the fourth quarter. Growth over the second half of 2025 is estimated to have averaged about 1¼%. Gross domestic product is expected to rise by 1.1% in 2026 and 1.5% in 2027. The pace of expansion is modest due Just in | Bank of Canada projects potential output growth at 1.0% for both 2026 and 2027, with the latter revised down from 1.3%. Breaking | Bank of Canada projects 2025 growth at 1.7%, an increase from the previous estimate of 1.2% in October. Just in | Bank of Canada revises 2026 inflation forecast to 2.0%, slightly down from October's 2.1%, while maintaining a 2.1% outlook for 2027.