Economics
Macklem Defends Bank of Canada Policy But Warns of Risks
- Economic damage could be ‘much worse’ without policy action
- Lower interest rates will heighten financial vulnerabilities
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Governor Tiff Macklem defended the Bank of Canada’s monetary policy during the pandemic, saying it supported the recovery, but cautioned the necessary moves will heighten vulnerabilities in the future.
In a speech Thursday, Macklem said the bank’s interest-rate cuts and asset purchases, along with fiscal relief from the government, have helped buffer the economic carnage from Covid-19. He acknowledged, however, that higher government debt levels will heighten current risks such as elevated debt levels.