BoC Governor Macklem reiterates that there could be a need to raise the policy rate further;

• Outlook for inflation has deteriorated.
• With the war in the Middle East persisting, global oil prices have increased and are expected to remain higher for longer, which is hitting Canadians at the gas pump and increasing costs for many businesses.

Governor-level repetition of a tightening bias is a familiar central bank posture when headline inflation is being pushed up by an energy supply shock: the institution signals resolve against second-round effects even where the first-round impulse is exogenous and rate-insensitive. The tension worth noting is the classic one between looking through an oil-driven price level shift and responding to the risk that it de-anchors expectations; governors who frame the shock as 'higher for longer' are explicitly rejecting the look-through option, which historically leans the reaction function more hawkish than the growth outlook alone would justify. For CAD and the front of the Canadian curve, the transmission runs through the policy differential against the Fed and through terms-of-trade support from crude itself, two channels that can pull in the same direction for the currency while diverging for rates. Comments of this kind also raise the beta of the next Canadian CPI prints, since a deteriorating inflation outlook tied to energy makes each release a test of whether pass-through is broadening into core. The follow-ons are whether other Governing Council members echo the rate-rise language and how it sits against the prevailing market pricing of the path. As reiterated guidance rather than a decision, the signal is directional.