(OTTAWA) Bank of Canada Governor Tiff Macklem says further interest rate hikes will be needed to bring inflation down, despite some early signs of an economic slowdown.
Posted at 12:28 p.m.
In the text of a speech to the Halifax Chamber of Commerce, Macklem said on Thursday that high inflation increasingly reflected domestic price pressures.
The governor pointed out that while global events such as the pandemic and Russia’s invasion of Ukraine fueled higher prices, demand was outstripping supply more broadly in the Canadian economy.
Macklem explained that the Bank of Canada pays particular attention to core measures of inflation, which tend to be less volatile than headline inflation.
Although there have been signs of a slowing economy, Macklem said core measures of inflation have not come down much and inflation expectations remain elevated.
The Bank of Canada has raised its key rate five times since March, and is expected to make its next monetary policy announcement on October 26.