BoC Governor Tiff Macklem said in a speech yesterday, “tighter monetary policy is necessary to lower the parts of inflation that are driven by domestic demand. And that is critical to bringing price increases back in line with our 2% inflation target.”
BoC will also be considering when to move to quantitative tightening, or QT. “The timing and pace of further increases in the policy rate, and the start of QT, will be guided by the Bank’s ongoing assessment of the economy and its commitment to achieving the 2% inflation target,” he added.
In the Q&A session, Macklem said, there is certainly considerable space to raise interest rates over the course of the year”. “If we have to move more quickly, we are prepared to do that,” he added. “I am not going to rule out a 50-basis-point move in the future.”
