Close X
Thursday, January 9, 2025
ADVT 
National

Effect of rate hikes will be 'powerful:' Poloz

Darpan News Desk The Canadian Press, 24 Nov, 2022 11:15 AM
  • Effect of rate hikes will be 'powerful:' Poloz

OTTAWA - The full effects of interest rate hikes have yet to be felt — and will be "even more powerful" than many anticipate, former Bank of Canada governor Stephen Poloz says.

Speaking at a conference in Ottawa hosted by Western University's Ivey Business School, the former governor warned today’s economy is more sensitive to interest rates than it was 10 years ago.

"Does anybody here think the sensitivity of the economy to interest rate movements is less today than it was five or 10 years ago?" Poloz asked. "I think (it) is more sensitive today than it was before."

Poloz estimates annual inflation will fall to about four per cent on its own as external factors, such as higher commodity prices, ease. Statistics Canada's most recent annual inflation rate sat at 6.9 per cent in October, the most recent available data.

He said policy action will need to do the rest of the work to get inflation back down to the central bank's two per cent target.

"I think that the actions that are being taken to get us there will turn out to be even more powerful than a lot of people think," Poloz said.

Though high inflation has persisted longer than the Bank of Canada's initial projections, Poloz defended the use of the word "transitory" to describe inflation pressures, noting that international contributors to inflation such as supply chain delays are already dissipating.

"In other words, the part of inflation that is externally driven, really is transitory. It's OK to use the word transitory," he said.

However, the former central bank governor says it takes time for that development to be reflected in the annual inflation rate.

Bank of Canada governor Tiff Macklem notably called inflation "transitory" — meaning temporary — when it first started rising.

Since then, he's backed away from that characterization and has emphasized that the domestic economy is overheated and inflation won't return to target without action from the central bank.

MORE National ARTICLES

B.C. auditor highlights math dispute with ministry

B.C. auditor highlights math dispute with ministry
Pickup says grants from the federal government, for example, should be recorded as revenue rather than deferred revenue — an adjustment that would result this year in a $6.5-billion boost to the surplus.

B.C. auditor highlights math dispute with ministry

Surrey RCMP is asking public’s help in locating the rightful owner of a found ring

Surrey RCMP is asking public’s help in locating the rightful owner of a found ring
The ring is described gold Cartier 52 with a diamond on the outside and an inscription on the inside of the band. The rightful owner will be required to prove ownership of the ring by providing police with the details of inscription as well as any other identifying marks.

Surrey RCMP is asking public’s help in locating the rightful owner of a found ring

IHIT identifies victim in neighbour dispute as Manbir Amar

IHIT identifies victim in neighbour dispute as Manbir Amar
On Wednesday, Surrey RCMP, responded to a report of a physical altercation between two neighbours in the 14100-block of 61 Avenue, Surrey. Officers attended and provided first aid, but sadly, despite best efforts, the victim’s condition deteriorated rapidly and he succumbed to his injuries on scene. A suspect was located on scene by Surrey RCMP and was arrested for murder.

IHIT identifies victim in neighbour dispute as Manbir Amar

Omicron vaccine in B.C. soon, Henry and Dix say

Omicron vaccine in B.C. soon, Henry and Dix say
Henry and Dix describe the shot as being more effective at protecting people from serious illness caused by Omicron, the most common variant of COVID-19 currently circulating in B.C. Officials are expected to provide further information about timing and eligibility for the shots on Sept. 6.

Omicron vaccine in B.C. soon, Henry and Dix say

Canada confirms 1,251 monkeypox cases

Canada confirms 1,251 monkeypox cases
The health agency on Wednesday said that of the confirmed cases, 582 cases are from Ontario, 493 from Quebec, 137 from British Columbia, 31 from Alberta, 3 from Saskatchewan, 2 from the Yukon and 1 each from Nova Scotia, Manitoba and New Brunswick.

Canada confirms 1,251 monkeypox cases

International student rules need reset: RBC paper

International student rules need reset: RBC paper
According to a separate RBC Economics report, businesses posted almost 70 per cent more job openings in Canada as of June 2022, compared to pre-pandemic. But these firms were competing for 13 per cent fewer unemployed workers than were available in February 2020.

International student rules need reset: RBC paper