Poloz Says Canadian Inflation Spike Doesn't Violate 2% Target
- Rate increases aren’t mechanical, Bank of Canada governor says
- Neutral rate may be lower than estimated due to headwinds
Stephen Poloz
Photographer: David Kawai/BloombergThis article is for subscribers only.
Bank of Canada Governor Stephen Poloz said he’s not worried about inflation temporarily rising above the 2 percent target this year, and the acceleration by itself isn’t sufficient to warrant an interest rate increase.
Speaking Saturday to reporters in Washington, Poloz said a tolerance for temporary movements is exactly why the central bank uses a 1 percent to 3 percent range for inflation and doesn’t mechanically raise interest rates when price growth surpasses the 2 percent point.