MNI BRIEF: BOC Sees Gradual Interest-Rate Rise Amid Hot Prices

Bank of Canada Governor Tiff Macklem said that the record low 0.25% policy interest rate won't surge as he acts to curb inflation that's more than double the 2% target, when asked in a TV interview Sunday if consumers should be ready for such a jump.

Macklem affirmed his earlier move to advance guidance for a rate increase to between April and September in the CTV interview, saying rates "aren't going to be as low for as long" and inflation may be "transitory but not short lived."

"We have been, and we will be adjusting our tools to bring inflation back to target," to make sure faster inflation doesn't become entrenched, he told CTV. The BOC recently shifted QE to a reinvestment phase and predicts inflation may slow to about 2% over the next year.

The governor also echoed comments from Canada's top banking regulator last week, saying that while some homebuyers are likely overstretched, the housing boom has gone on for a long time and "really the solution to this problem is supply." There "growing recognition" among policy makers that addressing supply is the best way forward, he told CTV.