Bank of Canada Deputy Governor Beaudry
in speech to the Alberta School of Business in Edmonton
Headlines via Reuters:
- Canadians shouldn't be concerned 'if we follow a slightly different path to inflation normalization than our counterparts'
- floating Canadian dollar gives the bank the flexibility to chart a different path than trading partners and focus on setting interest rates
- it will take time to get back to the bank's inflation target of 2%
- if people start to base inflation expectations on current high numbers rather than the 2% target, high inflation becomes persistent, volatile and self-perpetuating
- it is important to stay the course in the fight against inflation despite the short-term pain that high interest rates can cause
- without a sufficiently strong policy response, a drift in expectations away from the bank's inflation target can open the door to inflation remaining high and volatile for longer
- even if inflation has declined lately, we can't take our eyes off it too soon and let it remain significantly above target for too long
- if inflation stays above target for a significant amount of time, then high and variable inflation will likely go hand in hand with a less efficient, more distorted economy
