Bank of Canada Governor Tiff Macklem says more action is needed to lower inflation.
Macklem made the comments in a newspaper opinion piece that was published after Statistics
Canada reported consumer prices across the country moderated to 7.6% in July due largely to a
decline in gasoline prices.
“It will take some time before inflation is back to normal,” wrote Macklem in an article published
in The National Post newspaper. “We know our job is not done yet -- it won’t be done until
inflation gets back to the 2 per cent target.”
Macklem’s comments reaffirmed economists’ expectations that the Bank of Canada will raise
interest rates by as much as 75 basis points when it next meets on September 7.
The Bank of Canada shocked markets with a full-percentage-point interest rate increase in July.
The central bank’s trendsetting interest rate is now at 2.50% and economists expect it will reach
at least 3.50% by year’s end.
“By acting forcefully in raising interest rates now, we are trying to avoid the need for even higher
interest rates and a sharper slowing down the road,” Macklem wrote in the newspaper article.
The Bank of Canada targets inflation at the midpoint of a 1% to 3% range.
