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Macklem Reiterates Can Be Forceful With Hikes, May Move Beyond Neutral

BOC
(MNI) OTTAWA
  • "We are committed to using our policy interest rate to return inflation to target and will do so forcefully if needed" Governor Tiff Macklem says in opening statement to Senate banking committee
  • Comments echo Mon comments made at House of Commons panel
  • Current 1% policy rate "well below" neutral estimate of 2%-3%, and below pre-pandemic mark of 1.75%, he said
  • "If demand responds quickly to higher rates and inflationary pressures moderate, it may be appropriate to pause our tightening once we get closer to the neutral rate... On the other hand, we may need to take rates modestly above neutral for a period to bring demand and supply back into balance"
  • On Monday, Macklem said he's mulling another 50bp hike at June 1 meeting, bigger than that would be unusual
MNI Ottawa Bureau | +1 613-314-9647 | greg.quinn@marketnews.com
MNI Ottawa Bureau | +1 613-314-9647 | greg.quinn@marketnews.com

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