Bank of Canada governor Tiff Machlem, said that inflation in Canada remains too strong, and higher interest rates will be needed to tackle growing economy. Tiff Macklem added that inflation has decreased in recent months, but they have yet to see a generalized drop in price pressures. This hard phase will draw to a close, and they are getting closer but are not there yet.
After a strong job gain report for October 2022, the annual inflation rate of Canada held steady that same month at 6.9 percent, which is still far above the 2 percent target of the central bank, while core inflation measures were completely mixed.
Tiff Macklem told the members of parliament that they anticipate that inflation will remain high for the year, and begin to decline in 2023, and they are resolute to get inflation back to their target. The Bank of Canada raised rates by 50 basis points last month, lifting the policy rate to 3.75 percent.
Bank of Canada estimates the growth will decline from the fourth quarter of 2022 through the 2023. Bank of Canada governor reiterated that with hindsight, the bank would have started tightening monetary policy, adding the bank will review how monetary tools have worked.
According to Macklem, when they get inflation all back down to 2 percent, they are going to have a thorough review of how all they tools have worked. Conservatve Party Leader Pierre Poilievre said he will fire Bank of Canada governor and blames quantitative easing to growing price increases.