Top Bank of Canada officials speak after rate decision

TORONTO (Reuters) -Below are some key quotes from a news conference by Bank of Canada Governor Tiff Macklem and Senior Deputy Governor Carolyn Rogers on Wednesday after the central bank left its key interest rate on hold at a 15-year high of 4.50%.

Macklem on federal and provincial government spending plans

“The way I would put it is that government spending plans are not contributing to the slowing of growth that you see in our projection, but at the same time, they’re not standing in the way of getting inflation back to the 2% target.”

Macklem on market pricing of rate cut

“What I can say about our deliberations is that based on the information we have today, the implied expectation in the market that we’re going to be cutting our policy rate later in the year, that doesn’t look today like the most likely scenario to us.”

Boc’s macklem on projected weak growth

“We are seeing inflation come down even as the economy continues to grow. That is encouraging. But yes, we do expect growth to be weak. It’s expected to be weak through the rest of the year, pick up gradually over the course of next year.”

Macklem on potential for negative quarters for growth

“We’re forecasting small positives. When you’re forecasting small positives you can’t rule out that there’s going to be a couple quarters of small negatives. We’re not forecasting a major contraction. We’re not forecasting large increases in unemployment and in that sense it’s not what people associate with the word ‘recession.'”

Macklem on needing a period of weak growth

“I would remind you that we actually need a period of weak growth. We need growth to be weak to let supply catch up and relieve price pressures.”

Macklem on outlook for growth not changing very much

“I would say the high level message is that the outlook for growth has not changed very much. Growth came in a little bit weaker in the fourth quarter than we’d expected. It looks like it’s going to be stronger in the first quarter than we expected in January. We’re expecting pretty weak growth for the rest of the year, something a little less than 1%.”

Macklem on not forecasting a major contraction

“We’re not forecasting a major contraction. We’re not forecasting large increases in unemployment.”

(Reporting by Fergal Smith, Anna Mehler Paperny, Molly ConeCompiled by Fergal Smith; Editing by Josie Kao)