Bank of Canada Governor Tiff Macklem said that inflation may continue for longer than expected.
“I think for many people, transitory means it’s going to be over quickly and maybe I don’t know exactly what the right word is, but it’s probably something like you know, transitory but not short-lived.” Tiff Macklem said – in an interview with CTV.
Canada’s inflation rate is currently 4.4 percent, up from 4.1 percent in August, according to the latest data from Statistics Canada.
The central bank expects inflation to be close to 5 percent by the end of this year, which remains well above its 2 percent target.
Canadians saw inflation reflected in certain consumer goods such as meat, dairy, gas, and vehicles.
“I want to assure Canadians that we will keep inflation under control,” Tiff Macklem said. “And we have the tools, we have the mandate and we will adjust our tools to bring inflation back to target.”
These include quantitative easing, a program the bank started at the start of the pandemic – in which the bank buys government bonds, increasing the money supply, to keep interest rates low.
The bank’s policy rate remained at 0.25 percent to reduce short-term borrowing costs for businesses and households and stimulate economic recovery.
In 2020, the Bank of Canada did not anticipate rate increases until 2023. With new concerns about inflation far exceeding original inflation expectations, Macklem raised this timeline to 2022.