Tiff Macklem Leaves Rates Untouched, Is Confident Inflation Will Fall ‘Quickly’ In Coming Months

As was widely expected, Bank of Canada Governor Tiff Macklem opted to keep the overnight rate unchanged at 4.5%, gripped with confidence that inflation levels will keep receding quickly over the next several months.

Despite acknowledging there is still excess demand in the economy and employers are continuing to more hire workers, the Bank of Canada still opted to forego a rate hike for the second consecutive policy meeting. Policy makers said they’re confident high interest rates are filtering through the economy, and will keep economic growth capped at 1.4% in 2023 and 1.3% the following year.

In fact, Macklem is so confident in his preceding monetary policy, that he now expects inflation will “fall quickly” to around 3% by the second half of the year, before declining more “gradually to the 2% target by the end of 2024.” Still, the bank noted that bringing price pressures down to the target range “could prove to be more difficult because inflation expectations are coming down slowly, service price inflation and wage growth remain elevated, and corporate pricing behaviour has yet to normalize.”

Macklem reiterated that he hasn’t forgotten about restoring price stability, and is prepared to raise interest rates further in light of forthcoming economic data.

Information for this story was found via the Bank of Canada and the sources mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

Video Articles

Goliath Resources Hits 10.60 g/t Gold Over 22.82 Metres, Highest Grade Results In Third Distinct Rock Package At Surebet Discovery

Four Countries Control the Fertilizer That Feeds the World | Sage Potash

$10,000 Gold Is Just A Question of Time | Florian Grummes

Recommended

ESGold Outlines $24.3 Million NPV For Tailings Reprocessing Project

First Majestic Encounters 711 g/t Silver Equivalent Over 8.0 Metres In Ongoing Exploration At Los Gatos

Related News

Bank Of Canada Aggressively Adding Provincial Bonds and Mortgages to their Balance Sheet

Last week the Bank of Canada announced sweeping new measures to add liquidity to the...

Friday, March 27, 2020, 04:30:12 PM

Rising Food Costs And A Turkey Shortage Threaten This Year’s Thanksgiving Dinner

Thanksgiving will not be the same this year. On top of the rising costs of...

Sunday, November 6, 2022, 01:18:00 PM

CMHC: Canada Could Face A “Mild Recession” In A 3.5% Interest Rate Scenario

The Canadian economy might be headed for a “mild recession” should the Bank of Canada...

Tuesday, July 12, 2022, 02:21:00 PM

Jerome Powell Acknowledges ‘Substantial Further Progress’ Has Been Met, Taper Could Start in 2021

Fed Chair Jerome Powell has signalled that the central bank could begin tapering its unprecedented...

Friday, August 27, 2021, 06:03:07 PM

Bank of Canada Delivers 75 Basis-Point Hike, Vows to Continue Raising Rates as Inflation Becomes Entrenched

What likely is not a surprise to markets anymore, the Bank of Canada raised borrowing...

Wednesday, September 7, 2022, 11:08:37 AM