Governor Tiff Macklem’s crew of policymakers barely tried to conceal its alarm over recent data that suggests companies and households are starting to see inflation as permanent.
Central bankers have nightmares about the public losing faith in their ability to keep inflation low and stable. Most think one of the lessons of the 1970s and early 1980s is that suppliers and workers won’t overreact to temporary surges in commodity prices if they think the central bank will keep a lid on inflation.Article content
“The Governing Council continues to judge that interest rates will need to rise further, and the pace of increases will be guided by the bank’s ongoing assessment of the economy and inflation,” the statement said. “The Governing Council is resolute in its commitment to price stability and will continue to take action as required to achieve the two-per-cent target.”Article contentMacklem previously said he might have to push the benchmark rate above three per cent to get inflation under control.
An important factor in determining exchange rates is interest-rate differentials between various central banks. By going bigger than the Fed and other major central banks, the Bank of Canada will jolt traders into rethinking the values they assign to various currencies. The loonie should get a lift, which would lean against inflation — at least until the next Fed policy meeting, when chair Jerome Powell will have to confront his own inflation threat.
Tiff has to go now. Today. He’s killing people in Canada with these outrageous hikes. We have a housing bubble and now high interest rates. When the bubble pops people will be inside down on their mortgages. This is a war on the working class. Enough is enough
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