Economics
Bank of Canada’s 1% Policy Rate ‘Too Stimulative,’ Gravelle Says
Markets expect a second 50-basis-point interest rate hike at the Bank of Canada’s next policy decision on June 1.
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Bank of Canada Deputy Governor Toni Gravelle said borrowing costs need to rise quickly to more normal levels to bring inflation back to target, and that the current policy interest rate of 1% is “too stimulative.”
In a speech Thursday entitled “The Perfect Storm,” Gravelle reiterated that rates need to rise further into the neutral range of 2 to 3% in order to cool domestic inflation and bring the economy back to balance.