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Monetary policy - the right tool for the right job

· 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

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· Tiff Macklem Wiki · Bank of Canada WikiMonetary policy - the right tool for the right job

ContextRemarks to the Montreal Council on Foreign Relations in Quebec; the Bank of Canada keeps inflation low and stable and explains what monetary policy can and cannot do.

Why it mattersMacklem explains why the bank looks through short-term price shocks.

Problems raised
  1. Relative price shocks cause short-term inflation swings.
  2. The path to 2% is slow.
  3. Risks remain.
Solutions proposed
  1. Look through short-term price shocks.
  2. Use monetary policy for its proper job.
  3. Wait for clear easing of underlying inflation.
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