BoC's Macklem: Interest rate to stay at 0.25% until inflation is sustainably at 2% target


Bank of Canada (BoC) Governor Tiff Macklem said on Thursday that the benchmark interest rate will stay at its current record low of 0.25% until inflation is sustainably at the 2% target, as reported by Reuters.

Additional takeaways

"QE can widen wealth inequality by increasing the value of assets that are not distributed evenly across society."

"Bank will look closely at outcomes of QE in Canada and elsewhere to get a better idea of the impact on income and wealth inequality."

"Inequality has long been a concern of the bank, which has always recognized inflation is toughest for poorer Canadians and those on fixed incomes."

"Today we are in the sharpest and most unequal economic cycle in our lifetime."

"A complete recovery will be one with good job opportunities for those most affected by the pandemic; this includes low-wage earners, women, youth and racialized Canadians."

"Complete recovery means regaining jobs lost in pandemic and also creating jobs for new entrants into the labor force."

"Complete recovery means businesses are confident the pandemic is well behind us, and they are looking to add capacity or make investments."

Market reaction

The USD/CAD pair showed no immediate reaction to these comments and was last seen posting small daily gains at 1.2145.

 

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