Tiff Macklem warns of pressures from stimulus withdrawal

Bank of Canada Governor, Tiff Macklem, said Thursday that Canada’s high inflation rate is largely related to the unique circumstances of the Covid-19 pandemic, although there is a risk it could be more persistent than policy makers had expected.

Speaking virtually before the Council on Foreign Relations, in Washington, Macklem said the international monetary and financial system is well equipped to deal with challenges, but warned that pressures will likely accelerate as economies withdraw extraordinary stimulus.

Macklem noted that tighter financial conditions globally will suit some countries better than others as regions rebound from the Covid-19 crisis at different paces.

He also stressed the need for balance between long-run progress and short-run challenges as the international system evolves.