Macklem: Interest rates may not be high enough to bring inflation down to the target level

Bank of Canada Governor Tiff Macklem said in a speech to the Chamber of Commerce in Calgary, Alberta that interest rates may not be high enough to bring inflation down to the target level, sending a hawkish message after keeping borrowing costs at a 22-year high the day before.

Macklem explained that one possible reason for inflation remaining above target is that it may take longer for interest rates to work, but another possibility is that monetary policy is not yet restrictive enough to restore price stability.

Macklem stressed, "We do not want to raise the interest rate more than we have to," adding that "continued high inflation will be worse for Canadians than higher borrowing costs. We need to stay the course." He said, "Going forward, we will look for more evidence of declining price pressures."

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