Bank of Canada Governor Tiff Macklem reiterated on Monday that interest rates in Canada will need to be raised, noted that inflation is too high and said it will be high for longer than expected, reported Reuters.
Additional remarks summarized by Reuters:
Demand begins to exceed the productive capacity of the economy.
Businesses cannot find enough workers to meet demand and they will have to raise wages to attract and retain staff.
Widening pricing pressures are a big concern.
The bank is committed to using interest rates to bring inflation back to its target and will do so forcefully if necessary
We have no predefined destination for the key interest rate.
The rise in rates will depend on the reaction of the economy and the evolution of the outlook for inflation.
Reiterates that it may be appropriate to pause our tightening once we get closer to the neutral rate and then take stock.
Reiterates that, on the other hand, the BoC may need to raise rates slightly above neutral for a period to bring supply and demand back to equilibrium and inflation to target.
Macklem said it’s fair to say the price increases aren’t “transitional” as he put it last year.
Macklem said inflation is near its peak.
Macklem said he expects the bank to consider another 50 basis point hike in June.