Bank of Canada Governor: Estimated potential inflation close to 2.5%

Bank of Canada Governor Macklem: Consequences of the US trade policy shift are not as severe as imagined. Officials estimate potential inflation to be close to 2.5%. Officials project a 1.5% contraction in GDP in the second quarter. Indicators show idle capacity has increased since January. Rising potential inflation mainly reflects the increase in prices of goods excluding energy. The "reasons" for the slowdown in core CPI still exist. Companies report increased costs related to trade reallocation. Tariff uncertainty is suppressing business and household spending.