Oct 15, 2022
By Jeremy Logan
Tiff Macklem, governor of the Bank of Canada, highlighted the fact that despite growing concerns about a potential recession next year, he has not modified his position on interest rate increases.
In an interview with reporters, Macklem reiterated the central bank’s present goal of restoring price stability and reducing inflation down to its 2% target and said that now is not the time to be flexible on interest rates.
After Thursday’s release of the September inflation data showed that core consumer price inflation, excluding food and energy, rose to a 40-year high, increasing the likelihood of further significant rate hikes from the hawkish U.S. Federal Reserve, Macklem says the central bank will be closely monitoring how the U.S. economy develops.
As the Canadian dollar continues to lag, he is also keeping an eye on the U.S. dollar, warning that the central bank will need to do “additional work on interest rates” if the trend continues.
His comments come ahead of the latest reading on Canadian inflation, due out next week.
Despite the fact that food prices rose by 10.8% in August compared to the same month a year earlier, the fastest rate since 1981, the annual inflation rate for August was only 7%, thus Canadians were still suffering when they went to the grocery store.