MNI BRIEF: BOC Sees Case For Hiking Rates Just Beyond Neutral

Bank of Canada Governor Tiff Macklem told reporters Wednesday that there's a case for hiking borrowing costs a bit beyond the 1%-3% neutral range to break the inflation cycle and prevent the need for even more painful tightening later.

"By front-loading interest rate increases now, we are trying to avoid the need for even higher interest rates down the road," he said in an opening statement for a press conference. "Front-loaded tightening cycles tend to be followed by softer landings. This argues for getting our policy rate quickly to the top end or slightly above the neutral range."