BOC’s Macklem: Time to pause, assess whether policy is sufficiently restrictive

Following the Bank of Canada’s decision to raise the policy rate by 25 basis points to 4.5%, Bank of Canada (BoC) Governor Tiff Macklem delivers his remarks on the policy outlook and responds to questions.

Key Remarks

“Bank of Canada has raised rates rapidly, now it’s time to pause and assess whether monetary policy is sufficiently restrictive.”

“This is a conditional pause, dependent on the economy developing broadly in line with forecasts.”

“If we need to do more to get inflation to the 2% target, we will; if upside risks materialise we are prepared to raise rates further.”

“We are turning the corner on inflation, but are still a long way from our target.”

“Economic growth and spending in H2 2022 were stronger than forecast, our overheated economy did not cool as much as we had expected.”

“Lower gasoline prices are welcome but prices of essentials continue to rise too quickly.”

“We will be looking for accumulation of evidence to raise rates again.”

“It is far too early to be talking about interest rate cuts.”

“Finance minister has told me the Bank of Canada will be allowed temporarily to retain earnings for the purpose of covering losses.”

“It’s not going to feel good when the economy stalls, but we do need this period of no growth.”