![\"\"\/](\"https:\/\/www.newsbeep.com\/ca\/wp-content\/uploads\/2026\/10\/1792287730_503_indicator-big.gif\")
<\/p>\nBut Macklem also said that resilience is increasingly \u201cunder strain\u201d as shocks like the Middle East conflict persist and drive up energy prices.<\/p>\n
\t<\/p>\n
Some of those sources of resilience \u2014 like releasing global oil reserves \u2014 are being depleted, he said.<\/p>\n
\u201cYou can only release strategic energy, oil reserves so many times, but that has helped contain this energy price shock,\u201d Macklem said.<\/p>\n
The war in the Middle East is also spreading in the form of Houthi attacks on Saudi Arabia. Macklem said that escalation, combined with damage to refining capacity in the Gulf region and the closure of the Strait of Hormuz, means there\u2019s no relief in sight for global oil prices.<\/p>\n
Those global forces feed through into the prices Canadians pay at home for gasoline, diesel and heating oil.<\/p>\n
The Bank of Canada will release updated forecasts for the economy and inflation alongside its interest rate decision on Oct. 28.<\/p>\n
The central bank is mandated to keep inflation at its two per cent target. Inflation in Canada has held at three per cent for two months in a row.<\/p>\n
Macklem said he expects that outlook for inflation will be \u201cquite a bit higher\u201d than it was in the central bank\u2019s last forecast in July. That projection had inflation cooling to around 2.5 per cent in the second half of this year.<\/p>\n
The Bank of Canada will get a look at how domestic prices are responding to global cost pressures when Statistics Canada releases its September inflation report on Monday.<\/p>\n
The central bank raises its policy rate when inflation is likely to stray too far from its two per cent target.<\/p>\n
So far, the Bank of Canada has been content to look through near-term inflationary impacts from the war in Iran.<\/p>\n
But Macklem has increasingly signalled the central bank is getting worried about inflation and is prepared to react with hikes to its policy rate if monetary policymakers see signs price pressures are spreading.<\/p>\n
\u201cThe question we\u2019re going to be asking ourselves is, is inflation likely to come back down towards our target on its own, or are we going to have to raise interest rates to influence the path?\u201d he said Saturday.<\/p>\n
Despite headwinds facing the economy from U.S. tariffs and global geopolitical instability, Macklem also expressed some confidence in Canada.<\/p>\n
He argued relative stability in the value of the Canadian dollar compared to its American counterpart reflects some recent weakness in the U.S. dollar, but also external optimism in Canada.<\/p>\n
\u201cCanada is a well-governed, good partner. We\u2019re starting to see some recovery and investment. Companies are adapting to the increased tariff uncertainty. And I think that confidence is reflected,\u201d he said.<\/p>\n","protected":false},"excerpt":{"rendered":"But Macklem also said that resilience is increasingly \u201cunder strain\u201d as shocks like the Middle East conflict persist…\n","protected":false},"author":2,"featured_media":937073,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[49,48,44],"class_list":["post-937072","post","type-post","status-publish","format-standard","has-post-thumbnail","category-canada","tag-ca","tag-canada","tag-news"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/937072","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=937072"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/937072\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/937073"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=937072"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=937072"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=937072"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}