The Central Bank's Battle to Tame Inflation: A Marathon with the Last Stretch Being the Toughest

⚔️Taming inflation is a challenging and ongoing battle for the central bank.

📈Ten interest rate hikes in the past two years have helped control economic growth and bring down inflation in Canada.

🌍The central bank and economic observers are concerned about external risks that can drive up transportation costs and impact inflation.

🏠Many Canadians have put their home buying plans on hold, waiting for the central bank to reduce the key lending rate.

💰Persistently high shelter costs, including rent and mortgages, contribute to domestic inflation risks.

What are the external risks that can impact inflation?

—External risks include conflicts abroad, attacks in the Red Sea, and slowed traffic through the Panama Canal. These factors can drive up transportation costs and contribute to inflation.

Why do many Canadians have their home buying plans on hold?

—Many Canadians are waiting for the central bank to reduce the key lending rate before returning to the housing market. They believe even a small rate cut will be enough to prompt them to jump back in.

What factors contribute to domestic inflation risks?

—Persistently high shelter costs, such as rent and mortgages, are among the factors contributing to domestic inflation risks in Canada.

How has the central bank's actions affected economic growth?

—Ten interest rate hikes in the past two years have helped tame economic growth in Canada and bring down inflation.

When can we expect the first interest rate cut?

—Most economists expect the first interest rate cut to come in June or July.

00:00The central bank's battle to tame inflation is likened to a marathon, with the last stretch being the toughest.

00:07Governor Tiff Mam suggests that rate cuts are on the way, but careful consideration is needed to balance monetary policy and the progress made in reducing inflation.

00:09External risks, such as conflicts abroad and attacks in the Red Sea, can drive up transportation costs and impact inflation.

00:26Ten interest rate hikes in the past two years have helped control economic growth and bring down inflation in Canada.

01:08Persistently high shelter costs, including rent and mortgages, contribute to domestic inflation risks.