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Trudeau Officials Fear the Impact of Speedy Poloz Hikes

  • Higher borrowing costs may restrain consumers and curb growth
  • Finance minister has repeatedly declined comment on rate move
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Inflation Paves Way for More Canada Rate Hikes

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Officials within Prime Minister Justin Trudeau’s government are concerned the Bank of Canada is moving too quickly to raise interest rates, fearing higher borrowing costs could inadvertently trigger a downturn.

Governor Stephen Poloz raised the central bank’s key overnight rate this month for the first time since 2010, and another increase is expected by the end of the year. The officials, speaking anonymously because they’re not authorized to comment, are concerned a series of rate hikes would lead consumers to claw back spending, stunting a recovery from a two-year oil shock.