Bank of Canada concluded waiting to raise rates might solidify inflation expectations and make more aggressive hikes necessary. Read on.
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A summary of week-long deliberations that took place among governor Tiff Macklem and five deputies, released July 26, shows theArticle content However, despite some signals that tighter monetary policy in Canada and abroad was cooling demand, such as a softening in business investment intentions and export growth, persistent excess demand and strong consumer spending not seen in previous periods of monetary policy tightening were a concern, and Governing Council decided to impose the latest rate increase.
“The consensus among members was that the cost of delaying action was larger than the benefit of waiting,” the summary of deliberations said.“proving to be more persistent than expected,” the central bankers based their decision on two possible scenarios. In the first, they considered that there is simply a lag in the impact of previous rate hikes due to atypical circumstances and economic impacts of the COVID-19 pandemic, including a build-up of savings for some Canadians and pent-up demand for some goods and services. The council also discussed whether supply chain improvements andCalgary Herald Headline NewsEmail AddressBy clicking on the sign up button you consent to receive the above newsletter from Postmedia Network Inc.
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Bank of Canada considered pausing in July but feared fuelling inflation expectationsBank of Canada concluded waiting to raise rates might solidify inflation expectations and make more aggressive hikes necessary. Read on.
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Bank of Canada considered pausing in July but feared fuelling inflation expectationsBank of Canada concluded waiting to raise rates might solidify inflation expectations and make more aggressive hikes necessary. Read on.
Lire la suite »