Inflation risks getting stuck significantly above the Bank of Canada\u0027s 2% target and if that happens, the bank will raise rates. Read on.
but said rates may need to stay high for a while because of wage pressure in a tight labour market and sticky services prices.Sign up to receive the daily top stories from the Financial Post, a division of Postmedia Network Inc.By clicking on the sign up button you consent to receive the above newsletter from Postmedia Network Inc. You may unsubscribe any time by clicking on the unsubscribe link at the bottom of our emails or any newsletter. Postmedia Network Inc.
“But there is a risk that these adjustments will take longer or stall, and inflation will get stuck materially above the two per cent target,” Macklem told the Toronto Region Board of Trade. If the bank sees signs inflation is becoming entrenched above two per cent, “we are prepared to raise rates further,” he said.
After eight consecutive rate hikes, the bank said in January that it would pause its tightening campaign and not raise rates again if inflation came down as expected.
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