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MNI INTERVIEW: Big CPI Undershoot Unlikely- Ex-BOC Schembri

Former Deputy Governor Larry Schembri speaks about labor markets, trade and immigration.
Inflation frictions around record immigration, labor fights and global trade make significant undershooting of price targets unlikely, former Bank of Canada Deputy Governor Larry Schembri told MNI.
 

MNI (OTTAWA) - “The bigger risk is that inflation will be hard to keep close to 2% from above, rather than from below,” said Schembri, who served on the Bank's rate-setting panel from 2013 until June 2022.

Investors predict BOC Governor Tiff Macklem will cut a third time Wednesday after the last inflation report showed price gains slowing to a three-year low of 2.5%. The Bank has a single target of keeping inflation in the middle of a 1% to 3% band and officials have long said that target is symmetrical. Macklem said in July more rate cuts can be justified as inflation slows, and risks are titling away from elevated price gains of the last few years. 

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Inflation frictions around record immigration, labor fights and global trade make significant undershooting of price targets unlikely, former Bank of Canada Deputy Governor Larry Schembri told MNI.
 

MNI (OTTAWA) - “The bigger risk is that inflation will be hard to keep close to 2% from above, rather than from below,” said Schembri, who served on the Bank's rate-setting panel from 2013 until June 2022.

Investors predict BOC Governor Tiff Macklem will cut a third time Wednesday after the last inflation report showed price gains slowing to a three-year low of 2.5%. The Bank has a single target of keeping inflation in the middle of a 1% to 3% band and officials have long said that target is symmetrical. Macklem said in July more rate cuts can be justified as inflation slows, and risks are titling away from elevated price gains of the last few years. 

Keep reading...Show less