BOC’s Vincent: Firms continue to expect price changes to remain larger and more frequent

  • Still have a ways to go before pricing behaviour returns to normal
  • If firms’ recent pricing behaviour settles into a new normal, it could complicate return to low, stable and predictable inflation
  • More frequent and large price increases by firms are intimately linked to stronger than expected inflation
  • Downward path of inflation has been slower than anticipated, inflation proved to be stickier than many expected
  • It is clear we are not out of the woods yet on inflation and unusual amount of uncertainty continues to cloud our view
  • Full speech

Vincent helps set monetary policy in Canada and these comments tilt hawkish. I’m deeply worries about Canadian real estate at the moment as about 2% of mortgages reset per month in the country, leading to a big drag on consumer spending.

This article was written by Adam Button at Source