BoC Gov Maclem says expects policy rate will need to rise further

Bank of Canada Governor Tiff Macklem and Senior Deputy Carolyn Rogers appear before the House of Commons Standing Committee on Finance

We heard from Rogers on Tuesday (local CAD CAD The Canadian dollar (CAD) is the official currency of Canada and at the time of writing is the fifth most-held reserve currency in the world behind only the US dollar, euro, Japanese yen, and British pound.The CAD is commonly referred to as the Loonie by forex analysts and traders. At the time of writing, the CAD accounts for 2% of all global currency reserves.Its appeal is strong among central banking authorities given Canada’s economic strength, sovereignty, and historic stability.Originally i The Canadian dollar (CAD) is the official currency of Canada and at the time of writing is the fifth most-held reserve currency in the world behind only the US dollar, euro, Japanese yen, and British pound.The CAD is commonly referred to as the Loonie by forex analysts and traders. At the time of writing, the CAD accounts for 2% of all global currency reserves.Its appeal is strong among central banking authorities given Canada’s economic strength, sovereignty, and historic stability.Originally i Read this Term time):

• we have a long way to go to get inflation back to target

And, the knives are out for the housing sector says Rogers:

• we need lower house prices to restore balance to housing market

We can expect more of the same from Macklem and Rogers at this testimony.

Macklem:

• We expect our policy rate will need to rise further
• How much further policy rates would need to rise will depend on how monetary policy is working to slow demand
• Inflation Inflation Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Read this Term in Canada remains high and broad-based, reflecting large increases in both goods and services prices
• We have yet to see a generalized decline in price pressures
• Canadian economy is still in excess demand and it’s overheated
• Higher interest rates are beginning to weigh on growth
• Effects of higher rates will take time to spread through the economy
• Expect growth will stall in the next few quarters; once we get through this slowdown, growth will pick up
• We are trying to balance the risks of under- and over-tightening
• The tightening phase will come to an end, and we are getting closer, but we are not there yet
• with inflation so far above our target we are particularly concerned about the upside risks
• BoC balance sheet peaked in March 2021 at CAD575bn, as of last week it was around CAD 415bn, a drops of around 28%