The governor of the Bank of Canada, Tiff Macklemoffered support to the president of the Federal Reserve, Jerome Powell, in the face of the attacks of President Donald Trump, while the Canadian Policy head described the independence of the central banks as “sacrosananta”.
“The history of Independent Central Banks With clear mandates – in our case, an inflation objective – has been very beneficial for Canadians and similarly for other countries. I don’t think you want to threaten the independence of the Central Bank, ”Macklem said Thursday in response to a question about Trump’s pressure about Powell.
Trump has repeatedly criticized Powell on social networks, calling him “a great loser” and “fool”, suggesting that I should cut interest rates. He also threatened to say goodbye to the president of the Federal Reserve, before retracting and denying having considered saying goodbye to Powell.
After the publication of a report that warned that a prolonged commercial war threatens the financial stability of Canada, Macklem declared in a press conference in Ottawa that Tariffs will have permanent consequences, even if they are eliminated. “Confidence has been broken to some extent and we will not recover it completely immediately,” he said.
“Anyway, Canada should have done some things,” he added. “We should have developed broader markets than the United States. We should have strengthened our internal connectivity, trade and transport.”
It was important that the newly elected Canadian Prime Minister, Mark Carney, and Trump met in Washington earlier this week, Macklem said. “It is important that each other’s positions understand and that the communication is fluid. But, without a doubt, there is a long way to go. ”
Macklem pointed out the radical changes of Trump’s commercial policy, which included ads of substantial tariffs, followed by setbacks. “What must be made clear about this is that it is quite difficult to predict,” he said.
-The Central Bank maintained thestable rates at 2.75 percent at its last meeting in Aprilwhile the members of the Governing Council chose to wait for more information while weighing the volatile changes from the White House.
Even so, Macklem acknowledged that there have been positive advances in American commercial policy, including Thursday’s announcement with the United Kingdom, since the last meeting of the Central Bank. This decision places Canada on a path closer to the lowest tariff stage of the two options raised at that meeting, he said.
The statements suggest that Macklem feels increasingly comfortable commenting on the commercial policies and actions of the US administration. At the end of this month, he will meet with other central bankers and finance ministers of the seven group in Banff, Alberta, where he will appear among those who have the longest positions.
When asked about the role of the Central Bank itself in increasing household indebtedness, given their low rates in the decade prior to the inflation period after the pandemic, Macklem pointed out that vulnerabilities have been growing for a long time.
“We have been expressing our concern for the growing indebtedness of homes for many years. This has happened in a context of Low and high interest rates“, He said.” It is a broader problem than monetary policy. “
Republicans also give ‘support’ to Powell
Together, republican legislators have backed almost all the other economic ideas that he has presented to Trump in his second term; However, in interviews, several of them, including some that critical aspects of Powell’s trajectory, expressed their support for general performance and at the broadest principle that Central bankers must be protected from political interference.
“He has done so admirable, taking into account what he has had to face,” said Frank Lucas, representative of Oklahoma and a member of the Financial Services Committee of the House of Representatives, capturing the general mood. “It’s a stabilizing force”Said Senator Kevin Cramer, from North Dakota.
