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Bank of Canada: if economy develops as expected, no new rate hikes needed - BLOOMBERG

FEBRUARY 07, 2023

OTTAWA, Feb 7 (Reuters) - Bank of Canada Governor Tiff Macklem said on Tuesday that no further rate hikes will be needed if, as expected, the economy stalls and inflation comes down.

The central bank has over the last 11 months lifted rates at a record pace to 4.5% to tame inflation, which was 6.3% in December, still well above the bank’s 2% target. Last month, it said it would hold off on further moves to let the effects of past increases sink in.

“If new data are broadly in line with our forecast and inflation comes down as predicted, then we won’t need to raise rates further,” Macklem said in a speech to financial analysts in Quebec City.

“Inflation is turning the corner. Monetary policy is working,” Macklem said, adding that economic growth would be “close to zero” through the third quarter of this year.

On Monday, a median of market participants surveyed by the central bank forecast borrowing costs would come down by half-a-percentage-point by the end of this year, and would fall further next year.

(Reporting by Steve Scherer, editing by David Ljunggren)



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