- We wanted to send a clear message to Canadian businesses and Canadian households that they should expect inflation to come down and they should build that into their expectations.
- The fact that we haven’t seen as much appreciation of the Canadian dollar means we’ve got to do more through interest rates
- Canadians understand that the economy is overheated and it needs to cool
- We’re all seeing shortages of workers
- We’re all seeing shortages of goods and services
- Inflation is probably going to go up a little further before it starts coming down, and even when it starts coming down, in the beginning, it’s going to come down pretty slowly.
- Monetary policy works in the lag. The sooner you get started, the sooner it’s going to work
- Hikes "puts us in the middle of what we call the long-run neutral range" between 2-3%
- We also indicated that we do expect that interest rates will need to rise further to cool demand and let supply catch up and see some easing in inflationary pressures
- We stressed repeatedly that by front-loading the interest-rate increases, what we’re doing is we’re trying to avoid the need for interest rates to be even higher further down the road.
- Where interest rates ultimately need to go, is going to depend on the evolution of the economy and importantly, on the evolution of inflation
- we are not getting the historical investment boom in oil and gas that we’ve had when oil prices go up sharply like they have
- The USD has strengthened a lot our exchange rate is appreciating against most other countries
- Our objective is to get inflation back to target with a soft landing
- A year ago, oil was about 50 bucks. As we normally do, we assumed that it would stay roughly at 50 bucks
- if we had known everything a year ago that we know today, yes, we probably would have started raising interest rates a little bit earlier
- Full interview
Macklem will have a hard time living down this line from almost exactly two years ago:
