(OTTAWA) Returning to 2% inflation will take time and a period of weaker economic growth will be needed to reduce consumer price inflation, the Bank of Canada’s senior deputy governor said Thursday.
Posted at 1:12 p.m.
Carolyn Rogers was speaking the day after the announcement of a new three-quarter point increase in the Bank of Canada’s key interest rate, in a speech intended for the organization Calgary Economic Development. The central bank also warned on Wednesday that the key rate would have to rise even further so that inflation can return to its target.
In the text of his speech, Mr.me Rogers said global supply chain challenges and high commodity prices, along with an overheated Canadian economy, continued to put upward pressure on prices.
The risk of inflation taking root was weighed in the talks leading up to Wednesday’s interest rate hike, Ms.me Rogers.
The senior deputy governor said the bank would monitor the economy’s reaction to rising interest rates as well as global economic developments, and assess how much further interest rates need to rise.
Mme Rogers warned that the road to 2% inflation will take some time and that “there may be bumps along the way.”