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RBC CEO McKay Sees Inflation Prompting Rate Increases Next Year

  • Price pressure will build ‘earlier than later,’ banker says
  • U.S. consumers have $1.6 trillion in liquidity, RBC estimates
Dave McKay, president and chief executive officer of Royal Bank of Canada.
Dave McKay, president and chief executive officer of Royal Bank of Canada.Photographer: Dania Maxwell/Bloomberg

Royal Bank of Canada Chief Executive Officer Dave McKay says inflationary pressures will force central banks to start raising interest rates as soon as next year.

Large amounts of liquidity on consumers’ balance sheets, which he estimated at $1.6 trillion in the U.S. and C$212 billion ($168 billion) in Canada, combined with vaccines and new stimulus programs will lead to strong economic growth in the second half of 2021, McKay said at the bank’s financial institutions conference Tuesday.