The Bank of Canada is “prepared to act forcefully” to return inflation to its 2.0% target, said Deputy Governor Sharon Kozicki on Friday, reported Reuters. 

Additional Remarks:

“It’s important to be clear that returning inflation to the 2% target is our primary focus and unwavering commitment.”

“The pace and size of rate hikes and the start of QT will be active parts of our deliberations at our next decision.”

“Inflation in Canada is too high, labor markets are tight and there is considerable momentum in demand.”

“Households on average appear to be in better financial shape now than at the start of our 2017–18 tightening cycle.”

“Household indebtedness is now above pre-pandemic levels and its elevated level remains an important domestic vulnerability.”

“High indebtedness could amplify the impact of rising interest rates, and it could also worsen the impact of a future shock.”

“A key concern is the broadening of price pressures… around 2/3 of components in the Consumer Price Index are now exhibiting inflation above 3%.”

“Persistently elevated inflation increases the risk that longer-run inflation expectations could drift upward.”

“The nvasion of Ukraine is adding to inflationary pressures in Canada and the world… the bank is keeping close eye on events and impacts.”