Interest rates will remain high until 2024, the highest they have been in 22 years, according to Bank of Canada (BoC) Governor Tiff Macklem. .According to Blacklock’s Reporter, Macklem said the consistently high prices of groceries had “surprised” him..“We have been surprised,” Macklem told reporters. .The BoC increased its key rate on interbank loans by 25 points to 5%. .This is the highest level since April 17, 2001..“Inflationary pressures are proving more persistent,” said Macklem..“Meat’s up 6%, bread’s up 13%, coffee’s up 8%, baby food’s up 9%. If you look at food overall it is up 9%. Rent’s up 6%.”.“If you are planning to take a family holiday this summer, hotel prices are up 13% from last summer, restaurants are up 7%,” said Macklem. .“What is inflation? Inflation is a generalized increase in prices.”.Macklem said that there would likely be more rate increases. The next announcement about the rates is scheduled for September 6..“We know that our past interest rate increases are feeding through,” said Macklem. .“They are having an impact and there’s more to come. But what the total impact of those interest rates is, ultimately, is uncertain.”.“It is clearly too early to be talking about interest rate cuts,” said Macklem. .“We are certainly trying to balance the risks.” .On Wednesday, the BoC raised the interest rate for the tenth time since March 2, 2022..In a Monetary Policy Report, the BoC admitted that their previous predictions about food prices going down were incorrect..“Further easing of inflation will take longer than expected in previous reports,” wrote analysts..Targeted inflation of 2% was not now expected until “the middle of 2025,” said the report. .“The return of inflation to target is expected to occur two quarters later than previously projected.”.On Wednesday, Macklem did not mention the earlier warnings about an upcoming recession again. .However, Macklem said that only a small amount of growth was expected..“We still think growth will slow,” said Macklem. .“We think growth is going to average around 1% for the next year before picking up after that.”.Macklem has acknowledged past BoC forecasts were incorrect, including a mistaken 2020 prediction that inflation would “remain less than 2%.” .On July 15, 2020, Macklem also incorrectly forecasted continued low-interest rates..“We assume the pandemic will have largely run its course by the middle of 2022,” Macklem said at the time. .“Against that backdrop, we are being unusually clear that interest rates are going to be low for a long time.”.“Interest rates are going to be low for an extended period,” Macklem repeated at the time. .“We have a fairly long, slow recovery.”
Interest rates will remain high until 2024, the highest they have been in 22 years, according to Bank of Canada (BoC) Governor Tiff Macklem. .According to Blacklock’s Reporter, Macklem said the consistently high prices of groceries had “surprised” him..“We have been surprised,” Macklem told reporters. .The BoC increased its key rate on interbank loans by 25 points to 5%. .This is the highest level since April 17, 2001..“Inflationary pressures are proving more persistent,” said Macklem..“Meat’s up 6%, bread’s up 13%, coffee’s up 8%, baby food’s up 9%. If you look at food overall it is up 9%. Rent’s up 6%.”.“If you are planning to take a family holiday this summer, hotel prices are up 13% from last summer, restaurants are up 7%,” said Macklem. .“What is inflation? Inflation is a generalized increase in prices.”.Macklem said that there would likely be more rate increases. The next announcement about the rates is scheduled for September 6..“We know that our past interest rate increases are feeding through,” said Macklem. .“They are having an impact and there’s more to come. But what the total impact of those interest rates is, ultimately, is uncertain.”.“It is clearly too early to be talking about interest rate cuts,” said Macklem. .“We are certainly trying to balance the risks.” .On Wednesday, the BoC raised the interest rate for the tenth time since March 2, 2022..In a Monetary Policy Report, the BoC admitted that their previous predictions about food prices going down were incorrect..“Further easing of inflation will take longer than expected in previous reports,” wrote analysts..Targeted inflation of 2% was not now expected until “the middle of 2025,” said the report. .“The return of inflation to target is expected to occur two quarters later than previously projected.”.On Wednesday, Macklem did not mention the earlier warnings about an upcoming recession again. .However, Macklem said that only a small amount of growth was expected..“We still think growth will slow,” said Macklem. .“We think growth is going to average around 1% for the next year before picking up after that.”.Macklem has acknowledged past BoC forecasts were incorrect, including a mistaken 2020 prediction that inflation would “remain less than 2%.” .On July 15, 2020, Macklem also incorrectly forecasted continued low-interest rates..“We assume the pandemic will have largely run its course by the middle of 2022,” Macklem said at the time. .“Against that backdrop, we are being unusually clear that interest rates are going to be low for a long time.”.“Interest rates are going to be low for an extended period,” Macklem repeated at the time. .“We have a fairly long, slow recovery.”
