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Bank of Canada Fills In Mandate Blanks Amid Inflation Discomfort

  • Macklem offers more details on decision to add labor language
  • New framework gives bank flexibility to overshoot target
Tiff Macklem speaks alonside Chrystia Freeland during an Ottawa news conference on Dec. 13, 2021.
Tiff Macklem speaks alonside Chrystia Freeland during an Ottawa news conference on Dec. 13, 2021.Photographer: David Kawai/Bloomberg
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Governor Tiff Macklem underscored that price stability is central to the Bank of Canada’s renewed mandate and indicated that any new flexibility will apply only at times when inflation is low or the economy is weak.

In a speech Wednesday, Macklem provided more insight into the central bank’s new marching orders, which included some leeway to allow inflation to overshoot the central bank’s 2% target. Macklem made it clear that flexibility won’t apply in situations -- like now -- when inflation is way above target