Says Rates Are High Enough
Interest rates are high enough, Bank of Canada Governor Tiff Macklem said yesterday. Macklem questioned “how long we need to hold” the current benchmark rate of five percent on interbank loans unchanged since last July 12.

“We now think the Canadian economy is in modest excess supply and that is one of the things that is giving us more confidence that rates are high enough,” Macklem told reporters. “We have shifted our discussion to not whether we need to raise them any further but how long we need to hold them where they are.”

The next rate announcement is due April 10 just prior to cabinet’s April 16 budget. “It is still too early to consider lowering the policy interest rate,” said Macklem. “Recent inflation data suggest monetary policy is working largely as expected but future progress on inflation is expected to be gradual and uneven.”