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The path to price stability

· Tiff Macklem, Governor of the Bank of Canada (Canada)

Summary written by Dark Majestic in its own words · topics: monetary policy and interest rates, inflation and price stability, climate, energy and nature, public finances and debt

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· Tiff Macklem Wiki · Bank of Canada WikiThe path to price stability

ContextRemarks to the Canadian Club Toronto in Ontario; the Bank of Canada keeps inflation low and stable and is holding rates high to finish the fight against inflation.

Why it mattersMacklem says borrowing costs must remain elevated long enough to finish the job against rising prices.

Problems raised
  1. Inflation is falling but remains above the 2% target.
  2. New shocks such as wars, geopolitical tension, climate risk and high debt threaten stability.
  3. Price pressures differ widely from one sector of the economy to another.
Solutions proposed
  1. Keep the policy rate high enough, long enough, to bring inflation back to 2%.
  2. Watch core inflation measures closely before any easing.
  3. Look beyond aggregate data to spot sectoral price pressures early.
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