Bank of Canada governor Tiff Macklem meets with Christine Lagarde, left, president of the European Central Bank, at the G7 summit in Japan in May. Central banks around the world have been increasing interest rates, and some economists fear they will go too far, putting the economy into recession.
Wednesday's Monetary Policy Report from the Bank of Canada offered a similar lesson, as the central bank once again warned that the poor and over-borrowed were likely to suffer more from both high inflation and the high borrowing rates needed to bring down stubborn inflation. Asked repeatedly by reporters why a string of 10 interest rate hikes had not had a stronger impact on inflation, including food and house prices, Macklem and senior deputy governor Carolyn Rogers cited a number of effects, including a housing shortage, a strong labour market and the post-pandemic surge in immigration that recently sent Canada's population to theBut the other thing that may be "buffering" the effects of higher rates are forces similar to thethat we saw after the...