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MNI BRIEF: Highlights from BOC Gov Tiff Macklem's Speech

  • "Monetary policy works with a delay, and the effects of the tightening we’ve undertaken to date have not yet fully worked their way through the economy. If we start to see signs that inflation is likely to get stuck materially above our 2% target, we are prepared to raise rates further," said BOC Governor Tiff Macklem in a speech at the Toronto Region Board of Trade Thursday.
  • "In Canada the spillover effects have been muted, reflecting the financial stability we are known for internationally. This stability reflects a combination of strengths, including the structure of our financial system, strong risk management within our financial institutions, and sound regulation and supervision."
  • "We have separate mandates and separate tools for price  stability and financial stability. So we can work to achieve both at the same time. Our primary tool for bringing demand and supply in the economy into balance and restoring price stability is our policy interest rate. In the event of severe stress in the financial system, we have a range of tools we can use to provide liquidity against good collateral and keep credit flowing."
  • "Price and financial stability can interact. If financial stress were to lead to more tightening than expected and if this were to persist, we would need to take this into consideration as we set the policy rate to achieve our inflation target."

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