Bank of Canada Governor Tiff Macklem says interest rates will likely come down at some point in 2024 in what he predicts will be a transitional year for the Canadian economy.

In an exclusive interview with BNN Bloomberg’s Amanda Lang, Macklem predicted rates might begin to come down “sometime in 2024,” but did not provide a more detailed timeline.

“We're very focused on core inflation,” he said in the television interview set to air Friday, adding that the central bank will need to see “a number of months with sustained downward momentum in core inflation” before it cuts interest rates.

“(If) you look at our projection, it's some time next year, but I'm not going to put it on a calendar.”

That falls in line with economists’ predictions for rate cuts in the second or third quarter of 2024. 


The Bank of Canada began raising interest rates in March 2022 as it looked to tame inflation and bring it back to its target of two per cent.

Meanwhile, Canada’s inflation rate has been on a steady decline, coming in at 3.1 per cent in October, down from its June 2022 peak of 8.1 per cent.

The Bank of Canada has held its benchmark rate at five per cent at its last three rate-setting decisions.

In the interview, Macklem said he is gaining confidence that the central bank’s approach is working to bring inflation back to target.

“We are certainly feeling more confident that monetary policy is working and increasingly, the conditions are in place to get us back to two-per-cent inflation, but that is not yet assured, we're not there yet,” Macklem said.

“There are a few more things we need to see to be more confident that we're headed back to two per cent and we're watching those closely.”

November’s inflation data is expected on Tuesday.


While Macklem is increasingly confident in the trajectory of inflation, he said he expects some economic pain in the near-term.

“We do expect that it's going to be a year of transition. The first part is not going to feel good, I'm not going to sugar coat it,” he said.

  • The full Taking Stock interview with Macklem will air on Friday, Dec. 22 at 6 p.m. on BNN Bloomberg, 9 p.m. on CP24 and 10:30 p.m. on CTV News Channel.

“But as we get later in the year, I think we can expect growth to be picking up, inflation should be continuing to be coming down, should be getting closer to the target by the end of next year. We're not there yet, but we're getting there.”


As for interest rates, Macklem said he does not believe rates will ever fall to the rock-bottom levels Canadians saw before the pandemic.

“I think it is reasonable to expect that they'll come down, but they probably won't come down to pre-COVID-19 levels,” he said.

“We had 10 to 12 years of unusually low interest rates post-global financial crisis. I think there's good reasons to believe that we're not going back to those very low rates. That is going to be an adjustment.”


Interest rate hikes are designed to slow down the economy, but they also heighten the risk of a recession.

If the economy shrinks in the fourth quarter, Canada will have entered a technical recession, defined as two consecutive quarters of negative growth.

But Canada does enter a recession in the coming months, Macklem said is confident it won’t last long.

“We don't need a deep recession, we can get inflation back to two per cent without a recession,” he said.

“I'm not saying that we're predicting virtually zero growth for the next two, three quarters. You could get some small negatives, you could get some small positives, but even if it's small negatives, that's not a deep recession.”