Bank of Canada (BoC) Governor Tiff Macklem said interest rates should not go up again, according to Blacklock’s Reporter. “We now think the Canadian economy is in modest excess supply and that is one of the things that is giving us more confidence that rates are high enough,” said Macklem at a press conference. “We have shifted our discussion to not whether we need to raise them any further, but how long we need to hold them where they are.”The BoC held its interest rate at 5% on Wednesday. READ MORE: Bank of Canada holds policy rate at 5%The BoC said it is “continuing its policy of quantitative tightening.” While the Canadian economy grew more in the fourth quarter than expected, the pace was weak and below potential.“Real GDP expanded by 1% after contracting 0.5% in the third quarter,” it said. The next interest rate announcement is April 10 — six days prior to cabinet’s next budget. “It is still too early to consider lowering the policy interest rate,” said Macklem. “Recent inflation data suggest monetary policy is working largely as expected, but future progress on inflation is expected to be gradual and uneven.”A reporter asked him to expand on what those risks are. Domestically, Macklem said the risks “really come down to the persistence, or sometimes as economists we use this word ‘stickiness’ of underlying inflation.”When it comes to gas prices, he said they are expected to continue to add volatility to inflation in the coming months. He added high shelter prices are likely to persist. He called shelter “the biggest single contributor to inflation and it is certainly impacting Canadians.” However, there are other inflationary pressures beyond shelter and the BoC is looking at all options. Macklem had no update on a January report complaining inflation was too high with considerable uncertainty in the months ahead. “While the slowdown in the economy is anticipated to reduce inflationary pressures, other forces could keep inflation above the target for longer than expected,” it said.Macklem predicted economic growth would sputter at less than 1% in 2024. “Right now, growth has stalled,” he said.
