The Bank of Canada has warned that inflation in Canada is still evolving, and the central bank stands ready to be “forceful” on interest rates in the coming months, if needed.
Bank of Canada Deputy Governor Sharon Kozicki said in a speech delivered in Montreal that
“If we are surprised on the upside, we are still prepared to be forceful.”
In a policy decision on December 7, the Bank of Canada raised interest rates by 50 basis points (half a percentage point) while signaling that the central bank is prepared to slow its aggressive rate-hiking cycle should data show that inflation is coming down from its current level of 6.9%.
The Bank of Canada targets inflation at an annualized rate of 2%.
Deputy Governor Kozicki’s comments reinforce the central bank plans to remain vigilant on inflation and will continue raising interest rates if needed in 2023.
The Bank of Canada sees a mixed picture on consumer prices right now, but they remain “too high,” said Kozicki.
Bank of Canada Governor Tiff Macklem is scheduled to deliver a year-end speech and press conference in Vancouver, British Columbia on December 12.
