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 time):
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 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%
