By Canadian Press

Bank of Canada preparing for more uncertain and shock-prone future

Dec 16, 2024 | 12:20 PM

VANCOUVER — Bank of Canada governor Tiff Macklem says the central bank is preparing for a future that looks more uncertain and more prone to shocks.

In a speech to the Greater Vancouver Board of Trade, he says the spike in inflation in 2022 was a reminder that even though inflation was relatively low and stable for decades leading up to the pandemic, central banks cannot take public trust for granted.

Macklem says structural changes are underway in the world including technological change, a shift to a low-carbon economy and demographic shifts.

To prepare, Macklem says the Bank of Canada is readying for this future, learning from the lessons of the pandemic and its aftermath.

The Bank of Canada cut its key policy interest rate last week by a half a percentage point to 3.25 per cent.

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Macklem says the bank will be evaluating the need for further cuts one decision at a time and anticipates a more gradual approach to monetary policy if their economic forecasts hold.

This report by The Canadian Press was first published Dec. 16, 2024.

The Canadian Press