Reply To: Bank of Canada Hikes Rates 50 bps to Highest Level Since 2008


Bank of Canada’s Mackem:

To hit 2% inflation target we need to rebalance labor market
there is scope to cool labor market without causing the kind of unemployment surge we have typically experienced a recession’s
suggest unemployment rate will rise somewhat if the job vacancy returns to more normal levels, but it would not be high unemployment by historical standards
slightly negative growth is possible over the next few quarters
that’s not a severe recession, but it is a significantly slowing of the economy
right now we need the economy to slow down
to reach 2% inflation target we need to rebalance labor market and that will be a difficult adjustment
in recent months we are seeing additional signs that exceptionally tight labor market conditions have started to ease, wage growth looks to be plateauing
much of the inflation Canada is experiencing reflects domestic factors, namely excess demand in economy
Will be watching broad set of indicators to gauge health of labor market
we will be looking beyond headline unemployment numbers to gauge how different groups and labor market are adjusting
it will be hard to know when we have reached maximum sustainable