Highlights of prepared remarks from BOC’s Macklem press conference

  • Further rate decisions will be guided by assessment of incoming data and outlook for inflation.
  • Monetary policy is working but underlying inflationary pressures are proving more stubborn.
  • Higher interest rates are needed to slow growth of demand in the economy and relieve price pressures.
  • Labor market remains tight, even if there are some signs of easing.
  • Bank of Canada is prepared to raise rates further – Governor Tiff Macklem.
  • We are trying to balance the risks of under and over tightening monetary policy.
  • If we don’t do enough now we’ll likely have to do even more later.
  • Governing council’s decision to raise the policy rate reflected persistence in both excess demand and underlying inflationary pressures.
  • Consensus in governing council was that monetary policy needed to be more restrictive to bring inflation back to 2% target.
  • Governing council did discuss possibility of keeping rates unchanged, but cost of delaying action was larger than the benefit of waiting.
  • With increases in policy rate in June and July, our outlook has inflation going gradually back to 2% target.

This article was written by Greg Michalowski at www.forexlive.com. Source