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MNI INTERVIEW: BOC Needs Faster Hikes, Risks Slump-Ex Adviser

(MNI) Ottawa
(MNI)

Bank of Canada was slow to react to predictable inflation, Morck says.

The Bank of Canada needs to raise interest rates even faster after being late to curb inflation that was foreseeable through major pandemic stimulus, and the economy faces the risk of a hard landing, former BOC research fellow Randall Morck told MNI.

"The hard landing fears arise because many banks in particular might be carrying loans that will turn out to be bad after the post-Covid dust settles," said Morck, a University of Alberta professor whose work focuses on financial stability and monetary policy.

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The Bank of Canada needs to raise interest rates even faster after being late to curb inflation that was foreseeable through major pandemic stimulus, and the economy faces the risk of a hard landing, former BOC research fellow Randall Morck told MNI.

"The hard landing fears arise because many banks in particular might be carrying loans that will turn out to be bad after the post-Covid dust settles," said Morck, a University of Alberta professor whose work focuses on financial stability and monetary policy.

Keep reading...Show less