BoC Governor Tiff Macklem said yesterday that there’s “a bit more persistence” in inflation than policy makers previously thought. But he added, ” I think there are good reasons to believe that they are temporary,”
“Our job as a central bank is to make sure that one-off increase in prices doesn’t become ongoing inflation… What we’re really looking for is to see any signs of spreading,” he added, noting that medium- to longer-term measures of expected inflation had not risen.
He also pointed to the “frictions” in the labor market, which took longer to work through. “We’ve never reopened an economy before. And I think what we’re seeing is reopening an economy is a lot more complicated than closing one,” he said.