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Macklem’s Incompetence: Fighting the 1970s, Punishing Canada Today The Bank of Canada is hiking into a negative growth shock because it fears an inflation problem its own underlying data do not establish. This is not prudent risk management. It is incompetence dressed up as vigilance. Trimmed CPI inflation is 1.8% and declining. Employment is contracting. Even the Bank’s own statement puts inflation excluding gasoline at 2.2%, core inflation close to target, and longer-term inflation expectations firmly anchored. It acknowledges excess supply and expects new American tariffs to slow growth. Yet Macklem is raising rates because higher energy costs might eventually spread through the economy. The distinction matters. Higher oil prices squeeze purchasing power; tariffs impair production and trade. Higher interest rates cannot fix either problem. They can, however, compound the damage by weakening spending, housing and investment. Macklem is responding to an external cost shock by imposing an additional domestic demand shock. Second- and third-round inflation effects are risks to assess, not facts to assume!!! With underlying inflation subdued, jobs contracting and expectations anchored, the burden of proof lies with the central bank proposing to tighten. Its statement does not meet that burden. Macklem increasingly resembles a Davos technocrat intellectually trapped in the 1970s: invoking the dangers of an inflationary spiral while discounting the weakness in front of him. The spectre of that decade has become a substitute for judgment. His incompetence lies in that misdiagnosis. Hiking into a negative growth shocks leads to an avoidable recession. He is making Canadians pay higher borrowing costs today to insure against inflationary spillovers that have not yet materialized broadly in the data. A central bank should respond to evidence, not force today’s economy into yesterday’s cautionary tale. Yes it’s true: Tiff Macklem is worse than John Crow. The worst governor of the Bank of Canada in modern history.