Overview

• In a Saskatoon speech, Tiff Macklem delivered his first explicit public remarks on U.S. political pressure on the Federal Reserve.
• He said the U.S. dollar has depreciated about 10% since sweeping tariffs began in April, calling its safe-haven role into question as gold prices climbed more than 40%.
• Macklem warned that U.S. trade barriers and large fiscal deficits could lessen U.S. financial dominance with immense ramifications for Canada.
• He said monetary policy cannot undo the efficiency costs from tariffs, emphasizing the need for structural reforms rather than rate moves.
• Recent context includes President Trump’s intensified calls for rate cuts, threats toward Fed leadership, an attempted removal of Governor Lisa Cook now in court, and rate cuts last week by both the Fed—cited by Jerome Powell as data-driven—and the Bank of Canada.