Comments from Macklem following the Financial System Review:
- Recent rapid price increases in Canadian homes are not normal
- House price rises are largely driven by fundamental demand
- Supply has simply not been able to pivot to keep up with housing demand
- Important parts of the economy remain very weak
- We worry about housing but there are about 500,000 jobs that were lost in the pandemic and we have to worry about them too
- There are about 200,000 students that have entered the workforce since the pandemic
- We expect the rise in inflation will be temporary. Base effects will dissipate
- "We have a lot of excess supply in this economy" and that will pull inflation down to target after base effects run off
- Data we've received since last set of projections is largely in line with what we expected
- The financial system was very resilient to the covid shock but some of that reflects gov't and BOC response
There was nothing to move the Canadian dollar in this press conference but it's been grinding higher as risk trades continue to move up.
- If there is a material change in our inflation outlook, that's something we would take very seriously
