Bank of Canada declares overheated economy
2023.02.16 14:22
Bank of Canada declares overheated economy
By Ray Johnson
Budrigannews.com – For the first time since the report on the job loss in January came out last week, Bank of Canada Governor Tiff Macklem said on Thursday that the economy is still too hot and that higher interest rates could still happen.
During his testimony to the finance committee of the House of Commons, Macklem stated, “The Canadian economy remains overheated and clearly in excess demand, and this continues to put upward pressure on many domestic prices.”
He added, “The tightness in the labor market needs to ease, wage growth needs to moderate, and service price inflation needs to cool,” or else it will be necessary to raise interest rates again.
The Bank of Canada became the first major central bank to say it would likely hold off on further increases for the time being when it raised its key interest rate to 4.5 percent on January 25, making it the highest level in 15 years.
In his opening statements to the committee, Macklem reiterated the bank’s policy position.
Last week, data revealed that Canada’s employment growth in January exceeded expectations by ten times.
