Inflation fears take back seat as Bank of Canada puts focus on jobs recovery
Why Canada should be paying attention to the brawl over inflation in U.S. economics establishment
The pre-pandemic experience suggests the central bank needn’t fear inflation quite as much as it has in the past, which would allow policy-makers a freer hand to stoke economic growth.
It could have been a fluke. But in case it wasn’t, Macklem indicated that he and his deputies on the Governing Council agreed that they should probe the limits of their previous understanding of the relationship between employment and inflation.
Macklem, who took over as governor in June, on Feb. 23 observed that the unemployment rate had been unusually low for an extended period of time before the pandemic, and yet inflation never took off.
Tiff Macklem’s Bank of Canada is toying with letting the economy run hotter than would have been thought safe only a few years ago, re-enforcing the likelihood that interest rates will remain extremely low for at least another couple of years.
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“Based on past economic cycles, we would have …
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