Bank of Canada Chief: Interest Rates May Be High Enough to Tame Inflation, Avoiding Past Mistakes
• Bank of Canada Governor warns fighting inflation half-heartedly would be a mistake; interest rates may already be high enough to bring inflation back down
• Macklem contrasts current inflation fight to 1970s inflation; says living with inflation consequences then was hugely problematic
• Rapid rate hikes since March 2022 have slowed economic growth; rates may now be restrictive enough to get back to price stability
• Macklem acknowledges rate hikes add costs for Canadians, but says staying the course will be worth it
• Canada now has advantage of public inflation expectations coming down; also responded forcefully with rate hikes unlike 1970s