- 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