Macklem Broadly Repeats Beaudry Comments On Move Forcefully

Q: Given the vulnerabilities that are flagged in this report, can you give us your insight on whether or not households can handle a larger than 50bp hike in coming months?

A: We have indicated that we want to get our policy interest rate back into the neutral rate range quickly, estimated between 2-3%. In our last decision, we indicated that we were prepared to move more forcefully if needed. Last week Dep Gov Paul Beaudry also indicated that given inflation looks like it’ll go higher before it eases, broadening and the economy is overheating, the likelihood that we may need to go to the top of that 2-3% range or possibly somewhat above it has increased. When we indicate that we’re prepared to move more forcefully if needed, we’re saying we may need to take more rate steps to get inflation back to target or may need to move more quickly/take a larger step. Those decisions will be taken based on incoming data.