Bank of Canada Governor Tiff Macklem has suggested the economy will likely stall in the coming quarters, but that's as close as he’ll get to calling a recession until we’re in one, according to Royal Bank of Canada senior economist Josh Nye.
“Both (U.S. Federal Reserve Chair Jerome) Powell and Macklem have noted growing risk of recession in 2023, though the BoC went a bit further in suggesting the economy is likely to stall in the coming quarters and, in the near-term, modest declines in economic activity are just as likely as modest gains,” Nye said in a report.
  “We think that’s about as close as the BoC will come to calling a recession until we’re actually in one.”
The Bank of Canada and the U.S. Federal Reserve have both taken an aggressive approach to interest rate hikes over the past year, in an attempt to halt runaway inflation. 
According to Statistics Canada, in September the consumer price index (CPI) was up 6.9 per cent from a year ago.
South of the border, the Labor Department reported inflation rose 7.7 per cent in October from a year earlier, which was the smallest annual increase since the start of the year. That report on Thursday sent stock markets soaring as investors hypothesized that slowing inflation would translate into fewer aggressive moves by the U.S. Federal Reserve.
Nye said unemployment rates in both countries have inched higher but they remain just above cycle lows, and job vacancies are still remain elevated.
“Each of these economies (U.S. and Canada) is expected to enter recession in the coming months if they’re not already there,” Nye said.
Nye added that the upcoming Bank of Canada interest rate decision in December will hinge on key data points such as the latest jobs data and wage trends.
He said the market looks to be “modestly over-priced for further tightening.”
“We continue to expect the BoC will hit pause following a 25 basis point hike in December,” Nye said.
The Bank of Canada’s last interest rate decision for the year will be on Dec. 7.