The Governor of the Bank of Canada, Tiff Macklem, said that the economic slack in the Canadian economy has not yet been absorbed, but that “we are getting closer”, so it is no longer necessary to add more stimuli through QE, as reported by Reuters through the Financial Times. Macklem cautioned that since he believes slack still remains in the economy, substantial monetary stimulus is still necessary.
Regarding supply interruptions, the president pointed out that they seem to last longer than previously thought and that energy prices were adding to inflationary pressures. “If the bank is wrong about the persistence of inflationary pressures, they will adjust,” Macklem said, before adding that the BoC’s future direction has been clear that rates will not rise until economic slack is absorbed.
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