Bank of Canada Governor Tiff Macklem
- supply chain disruptions are likely to be more persistent than expected
- supply chain challenges mean inflation in Canada and other IMF members is probably going to take a little longer to come back down
- concern around the table is that bottlenecks are not easing as quickly as expected; they are looking to be more complicated, more persistent than we previously thought
- global value chain disruptions are largely temporary but there is a risk that some element of that is more ongoing; that would have more permanent effect on supply
- supply chain challenges mean near term economic rebound in Canada won't come quite as fast as the Bank had forecast in July
- so far causes for rise of Canadian inflation are fairly narrow; were they to broaden and be sustained that would be more of a concern
- medium to longer term inflation expectations remain very well anchored in Canada and other advanced nations
- so far we are not seeing any evidence of sustained inflation; wage measures have ticked up a little bit but are not providing any independent source of inflation
- slack in the Canadian labour market remains, unemployment rate not back to where it was before pandemic
- Canada job growth has been concentrated in areas where it was needed the most, such as youth and women
Headlines via Reuters, bolding mine. Macklem not sounding very much concerned on inflation, and still sees slack on the employment market. Sounding quite like the RBA! Like the RBA the Bank of Canada is set on a tapering course but nothing more aggressive than that in the pipeline for now.
