{"id":20673,"date":"2022-04-13T16:45:15","date_gmt":"2022-04-13T16:45:15","guid":{"rendered":"https:\/\/www.pantheregroup.com\/2022\/04\/13\/bank-of-canada-is-far-from-finished-hiking-interest-rates\/"},"modified":"2022-04-13T16:45:15","modified_gmt":"2022-04-13T16:45:15","slug":"bank-of-canada-is-far-from-finished-hiking-interest-rates","status":"publish","type":"post","link":"https:\/\/www.pantheregroup.com\/2022\/04\/13\/bank-of-canada-is-far-from-finished-hiking-interest-rates\/","title":{"rendered":"Bank of Canada is far from finished hiking interest rates"},"content":{"rendered":"<p> \n<\/p>\n<div id=\"\">\n<header aria-label=\"Beginning of Article\" class=\"article-header\">\n<nav aria-label=\"Breadcrumb\" class=\"breadcrumbs\">\n<h2 class=\"visually-hidden\">Breadcrumb Trail Links<\/h2>\n<ol class=\"breadcrumbs__items list-unstyled\">\n<li class=\"breadcrumbs__item\"> News <\/li>\n<li class=\"breadcrumbs__item\"> FP Economy <\/li>\n<\/ol>\n<\/nav>\n<p class=\"article-subtitle\"> Canada&#8217;s economy is firing on all cylinders; unfortunately so is inflation <\/p>\n<div class=\"article-meta\">\n<div class=\"published-date\">\n<p>Publishing date:<\/p>\n<p> <span class=\"published-date__since\">Apr 13, 2022<\/span> \u00a0\u2022\u00a0 <span class=\"updated-date__since\">26\u00a0minutes ago<\/span> \u00a0\u2022\u00a0 <span class=\"published-date__word-count\">3 minute read<\/span> \u00a0\u2022\u00a0 <span>  <span class=\"comment-bubble\"> <svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" height=\"16\" viewbox=\"0 0 24 24\" width=\"16\"><path d=\"M4,0 C2.93914,0 1.921718,0.421428 1.171572,1.171572 C0.421428,1.921718 0,2.93914 0,4 L0,24 L3.846,20.158 L4,20.16 L20,20.16 C21.0608,20.16 22.0782,19.73858 22.8284,18.98842 C23.5786,18.23828 24,17.22086 24,16.16 L24,4 C24,2.93914 23.5786,1.921718 22.8284,1.171572 C22.0782,0.421428 21.0608,0 20,0 L4,0 Z M2,4 C2,3.46956 2.21072,2.96086 2.58578,2.58578 C2.96086,2.21072 3.46956,2 4,2 L20,2 C20.5304,2 21.0392,2.21072 21.4142,2.58578 C21.7892,2.96086 22,3.46956 22,4 L22,16.16 C22,16.69044 21.7892,17.19914 21.4142,17.57422 C21.0392,17.94928 20.5304,18.16 20,18.16 L4,18.16 L3.048,18.126 L2,19.174 L2,4 Z\"\/><\/svg><\/span> 25 Comments  <\/span> <\/div><\/div>\n<figure class=\"featured-image\"><picture class=\"featured-image__ratio\"><source media=\"(min-width: 1200px)\" srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/04\/tiff-macklem-0413.jpg?quality=90&amp;strip=all&amp;w=564&amp;h=423&amp;type=webp,&#10;            https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/04\/tiff-macklem-0413.jpg?quality=90&amp;strip=all&amp;w=1128&amp;h=846&amp;type=webp 2x\" type=\"image\/webp\"\/><source media=\"(min-width: 1200px)\" srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/04\/tiff-macklem-0413.jpg?quality=90&amp;strip=all&amp;w=564&amp;h=423&amp;type=jpg,&#10;                https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/04\/tiff-macklem-0413.jpg?quality=90&amp;strip=all&amp;w=1128&amp;h=846&amp;type=jpg 2x\" type=\"image\/jpeg\"\/><source media=\"(min-width: 768px)\" srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/04\/tiff-macklem-0413.jpg?quality=90&amp;strip=all&amp;w=472&amp;h=354&amp;type=webp,&#10;            https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/04\/tiff-macklem-0413.jpg?quality=90&amp;strip=all&amp;w=944&amp;h=708&amp;type=webp 2x\" type=\"image\/webp\"\/><source media=\"(min-width: 768px)\" srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/04\/tiff-macklem-0413.jpg?quality=90&amp;strip=all&amp;w=472&amp;h=354&amp;type=jpg,&#10;                https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/04\/tiff-macklem-0413.jpg?quality=90&amp;strip=all&amp;w=944&amp;h=708&amp;type=jpg 2x\" type=\"image\/jpeg\"\/><source media=\"(max-width: 767px)\" srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/04\/tiff-macklem-0413.jpg?quality=90&amp;strip=all&amp;w=288&amp;h=216&amp;type=webp,&#10;            https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/04\/tiff-macklem-0413.jpg?quality=90&amp;strip=all&amp;w=576&amp;h=432&amp;type=webp 2x\" type=\"image\/webp\"\/><\/picture><figcaption class=\"featured-image__caption image-caption\"><span class=\"caption\">Bank of Canada governor Tiff Macklem. <\/span> <span class=\"credit\">Photo by Blair Gable\/Reuters<\/span> <\/figcaption><\/figure>\n<\/header>\n<section class=\"article-content__content-group\">\n<h2 class=\"visually-hidden\">Article content<\/h2>\n<p>The Bank of Canada intentionally overdid it on the way into the COVID recession. So, perhaps it shouldn\u2019t be a surprise that policy-makers are scrambling to keep up with an economy that heated up faster than they anticipated.<\/p>\n<\/section>\n<div class=\"ad__section-border article-content__ad-group\">\n<section aria-describedby=\"advertisment1567410406844023481345632150963519\" class=\"ad\">\n<h2 class=\"visually-hidden\" id=\"advertisment1567410406844023481345632150963519\">Advertisement 2<\/h2>\n<div class=\"ad__container\">\n<div class=\"ad__inner\" id=\"ad__inner-2\">\n<div class=\"ad__inner__container\" data-ad=\"[[6,6],[1200,250],[1200,90],[970,90],[970,250],[728,90],[300,250]]\" data-ad-interscroller=\"6x6\" data-ad-loc=\"2\" data-ad-mobile=\"[[6,6],[320,50],[300,50],[300,250],[300,600]]\" id=\"ad-2\" style=\"--desktopHeight:250px;--mobileHeight:600px\">\n<div aria-hidden=\"true\" class=\"ad__placeholder\">\n<p> This advertisement has not loaded yet, but your article continues below. <\/p>\n<\/p><\/div><\/div><\/div><\/div>\n<\/section>\n<\/div>\n<section class=\"article-content__content-group\">\n<h2 class=\"visually-hidden\">Article content<\/h2>\n<p data-async=\"\">Governor Tiff Macklem and his deputies raised the benchmark interest rate by half a percentage point on April 13, an aggressive move, as central banks prefer to move in quarter-point increments.<\/p>\n<p>Policy-makers also said they would initiate \u201cquantitative tightening,\u201d which means the central bank will remove itself as an active participant in the bond market. The Bank of Canada purchased hundreds of billions of dollars of bonds during the recession to put additional downward pressure on interest rates and had been reinvesting what it earned when those assets matured. The reinvesting will now stop.<\/p>\n<p data-async=\"\">The outsized increase in borrowing costs, which took the benchmark interest rate to one per cent, was widely anticipated; the central bank had telegraphed that stronger-than-forecast inflation would force it to accelerate its march back to a more normal interest-rate setting.<\/p>\n<\/section>\n<div class=\"ad__section-border article-content__ad-group\">\n<section aria-describedby=\"advertisment8532155758633048424462687346346776\" class=\"ad\">\n<h2 class=\"visually-hidden\" id=\"advertisment8532155758633048424462687346346776\">Advertisement 3<\/h2>\n<div class=\"ad__container\">\n<div class=\"ad__inner\" id=\"ad__inner-3\">\n<div class=\"ad__inner__container\" data-ad=\"[[7,7],[1200,250],[1200,90],[970,90],[970,250],[728,90],[300,250]]\" data-ad-interscroller=\"7x7\" data-ad-loc=\"3\" data-ad-mobile=\"[[7,7],[300,250],[320,50],[300,50]]\" id=\"ad-3\" style=\"--desktopHeight:250px;--mobileHeight:250px\">\n<div aria-hidden=\"true\" class=\"ad__placeholder\">\n<p> This advertisement has not loaded yet, but your article continues below. <\/p>\n<\/p><\/div><\/div><\/div><\/div>\n<\/section>\n<\/div>\n<section class=\"article-content__content-group\">\n<h2 class=\"visually-hidden\">Article content<\/h2>\n<figure class=\"embedded-image\"><picture class=\"embedded-image__ratio\"><source data-srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/04\/FP0413-2022-BOC-RATE.png?quality=90&amp;strip=all&amp;w=564&amp;type=webp,&#10;            https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/04\/FP0413-2022-BOC-RATE.png?quality=90&amp;strip=all&amp;w=1128&amp;type=webp 2x\" media=\"(min-width: 1200px)\" srcset=\"https:\/\/financialpost.com\/data:,https:\/\/financialpost.com\/1w\" type=\"image\/webp\"\/><source data-srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/04\/FP0413-2022-BOC-RATE.png?quality=90&amp;strip=all&amp;w=564&amp;type=jpg,&#10;                https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/04\/FP0413-2022-BOC-RATE.png?quality=90&amp;strip=all&amp;w=1128&amp;type=jpg 2x\" media=\"(min-width: 1200px)\" srcset=\"https:\/\/financialpost.com\/data:,https:\/\/financialpost.com\/1w\" type=\"image\/jpeg\"\/><source data-srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/04\/FP0413-2022-BOC-RATE.png?quality=90&amp;strip=all&amp;w=472&amp;type=webp,&#10;            https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/04\/FP0413-2022-BOC-RATE.png?quality=90&amp;strip=all&amp;w=944&amp;type=webp 2x\" media=\"(min-width: 768px)\" srcset=\"https:\/\/financialpost.com\/data:,https:\/\/financialpost.com\/1w\" type=\"image\/webp\"\/><source data-srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/04\/FP0413-2022-BOC-RATE.png?quality=90&amp;strip=all&amp;w=472&amp;type=jpg,&#10;                https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/04\/FP0413-2022-BOC-RATE.png?quality=90&amp;strip=all&amp;w=944&amp;type=jpg 2x\" media=\"(min-width: 768px)\" srcset=\"https:\/\/financialpost.com\/data:,https:\/\/financialpost.com\/1w\" type=\"image\/jpeg\"\/><source data-srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/04\/FP0413-2022-BOC-RATE.png?quality=90&amp;strip=all&amp;w=288&amp;type=webp,&#10;            https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/04\/FP0413-2022-BOC-RATE.png?quality=90&amp;strip=all&amp;w=576&amp;type=webp 2x\" media=\"(max-width: 767px)\" srcset=\"https:\/\/financialpost.com\/data:,https:\/\/financialpost.com\/1w\" type=\"image\/webp\"\/><img decoding=\"async\" alt=\"\" class=\"embedded-image__image lazyload\" src=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/04\/FP0413-2022-BOC-RATE.png?quality=90&amp;strip=all&amp;w=288\" srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/04\/FP0413-2022-BOC-RATE.png?quality=90&amp;strip=all&amp;w=288,&#10;                https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/04\/FP0413-2022-BOC-RATE.png?quality=90&amp;strip=all&amp;w=576 2x\" height=\"884\" loading=\"lazy\" width=\"1000\"\/><\/picture><\/figure>\n<p data-async=\"\">Less anticipated, perhaps, was the extent to which the economy is straining on the central bank\u2019s reins. The Bank of Canada\u2019s new quarterly economic forecast sees gross domestic product increasing at an annual rate of six per cent in the second quarter, which is a rate of growth you would expect in the earliest days of a recovery, not at the point at which the recovery is over and the jobless rate is at a modern low.<\/p>\n<p>All that growth would be something to cheer if it wasn\u2019t paired with equally strong inflation. The Bank of Canada acknowledged that it underestimated how much the consumer price index would increase in the first quarter, and now predicts an average monthly gain of 5.6 per cent, compared with a 5.1-per-cent forecast in January.<\/p>\n<\/section>\n<div class=\"ad__section-border article-content__ad-group\">\n<section aria-describedby=\"advertisment2583899873267106638783280663949599\" class=\"ad\">\n<h2 class=\"visually-hidden\" id=\"advertisment2583899873267106638783280663949599\">Advertisement 4<\/h2>\n<div class=\"ad__container\">\n<div class=\"ad__inner\" id=\"ad__inner-4\">\n<div class=\"ad__inner__container\" data-ad=\"[[1200,250],[1200,90],[970,90],[970,250],[728,90],[300,250]]\" data-ad-loc=\"4\" data-ad-mobile=\"[[320,50],[300,50],[300,250]]\" id=\"ad-4\" style=\"--desktopHeight:250px;--mobileHeight:250px\">\n<div aria-hidden=\"true\" class=\"ad__placeholder\">\n<p> This advertisement has not loaded yet, but your article continues below. <\/p>\n<\/p><\/div><\/div><\/div><\/div>\n<\/section>\n<\/div>\n<section class=\"article-content__content-group\">\n<h2 class=\"visually-hidden\">Article content<\/h2>\n<figure class=\"embedded-image\"><picture class=\"embedded-image__ratio\"><source data-srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/04\/thumbnail_FP0413-2022-inflation-Canada-US.png?quality=90&amp;strip=all&amp;w=564&amp;type=webp,&#10;            https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/04\/thumbnail_FP0413-2022-inflation-Canada-US.png?quality=90&amp;strip=all&amp;w=1128&amp;type=webp 2x\" media=\"(min-width: 1200px)\" srcset=\"https:\/\/financialpost.com\/data:,https:\/\/financialpost.com\/1w\" type=\"image\/webp\"\/><source data-srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/04\/thumbnail_FP0413-2022-inflation-Canada-US.png?quality=90&amp;strip=all&amp;w=564&amp;type=jpg,&#10;                https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/04\/thumbnail_FP0413-2022-inflation-Canada-US.png?quality=90&amp;strip=all&amp;w=1128&amp;type=jpg 2x\" media=\"(min-width: 1200px)\" srcset=\"https:\/\/financialpost.com\/data:,https:\/\/financialpost.com\/1w\" type=\"image\/jpeg\"\/><source data-srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/04\/thumbnail_FP0413-2022-inflation-Canada-US.png?quality=90&amp;strip=all&amp;w=472&amp;type=webp,&#10;            https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/04\/thumbnail_FP0413-2022-inflation-Canada-US.png?quality=90&amp;strip=all&amp;w=944&amp;type=webp 2x\" media=\"(min-width: 768px)\" srcset=\"https:\/\/financialpost.com\/data:,https:\/\/financialpost.com\/1w\" type=\"image\/webp\"\/><source data-srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/04\/thumbnail_FP0413-2022-inflation-Canada-US.png?quality=90&amp;strip=all&amp;w=472&amp;type=jpg,&#10;                https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/04\/thumbnail_FP0413-2022-inflation-Canada-US.png?quality=90&amp;strip=all&amp;w=944&amp;type=jpg 2x\" media=\"(min-width: 768px)\" srcset=\"https:\/\/financialpost.com\/data:,https:\/\/financialpost.com\/1w\" type=\"image\/jpeg\"\/><source data-srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/04\/thumbnail_FP0413-2022-inflation-Canada-US.png?quality=90&amp;strip=all&amp;w=288&amp;type=webp,&#10;            https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/04\/thumbnail_FP0413-2022-inflation-Canada-US.png?quality=90&amp;strip=all&amp;w=576&amp;type=webp 2x\" media=\"(max-width: 767px)\" srcset=\"https:\/\/financialpost.com\/data:,https:\/\/financialpost.com\/1w\" type=\"image\/webp\"\/><img decoding=\"async\" alt=\"\" class=\"embedded-image__image lazyload\" src=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/04\/thumbnail_FP0413-2022-inflation-Canada-US.png?quality=90&amp;strip=all&amp;w=288\" srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/04\/thumbnail_FP0413-2022-inflation-Canada-US.png?quality=90&amp;strip=all&amp;w=288,&#10;                https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/04\/thumbnail_FP0413-2022-inflation-Canada-US.png?quality=90&amp;strip=all&amp;w=576 2x\" height=\"826\" loading=\"lazy\" width=\"1001\"\/><\/picture><\/figure>\n<p>Policy-makers see average headline inflation of 5.8 per cent in the second quarter, and forecast that price increases will remain well above the high end of their comfort zone \u2014 one per cent to three per cent \u2014 for the rest of the year.<\/p>\n<p>The Bank of Canada said the war in Ukraine is the primary reason it underestimated inflation. Russia and Ukraine are big exporters of oil, natural gas, wheat and other commodities, and prices for those important inputs have soared since Russian President Vladimir Putin\u2019s invasion of Ukraine on Feb. 24.<\/p>\n<section aria-labelledby=\"moreTopicLabel1537295615857619113182405140147864\" class=\"more-topic\" data-carousel-component=\"\" data-carousel-icon-button=\"\" data-carousel-type=\"list\"> <button aria-hidden=\"true\" class=\"more-topic__button-prev\" data-carousel-prev=\"\" tabindex=\"-1\" title=\"previous\" type=\"button\"\/> <\/p>\n<ol class=\"more-topic__items list-unstyled\" data-carousel-slide-list=\"\" tabindex=\"0\">\n<li class=\"more-topic__item\" data-carousel-item=\"\">  <picture class=\"more-topic__item-image\"><img decoding=\"async\" alt=\"The Bank of Canada building in Ottawa.\" class=\"lazyload\" src=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/04\/bank-of-canada-vw0413.jpg?h=96&amp;strip=all&amp;quality=80\" height=\"96\" loading=\"lazy\" srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/04\/bank-of-canada-vw0413.jpg?h=96&amp;strip=all&amp;quality=80,&#10;                                    https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/04\/bank-of-canada-vw0413.jpg?h=192&amp;strip=all&amp;quality=80 2x,&#10;                                    https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/04\/bank-of-canada-vw0413.jpg?h=288&amp;strip=all&amp;quality=80 3x\" width=\"96\"\/><\/picture>\n<h3 class=\"more-topic__item-text\"> <span class=\"more-topic__item-text-clamp\"> Bank of Canada raises interest rate: Read the official statement <\/span> <\/h3>\n<\/li>\n<li class=\"more-topic__item\" data-carousel-item=\"\">  <picture class=\"more-topic__item-image\"><img decoding=\"async\" alt=\"Bank of Canada Governor Tiff Macklem.\" class=\"lazyload\" src=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/04\/tiff-macklem-0404.jpg?h=96&amp;strip=all&amp;quality=80\" height=\"96\" loading=\"lazy\" srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/04\/tiff-macklem-0404.jpg?h=96&amp;strip=all&amp;quality=80,&#10;                                    https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/04\/tiff-macklem-0404.jpg?h=192&amp;strip=all&amp;quality=80 2x,&#10;                                    https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/04\/tiff-macklem-0404.jpg?h=288&amp;strip=all&amp;quality=80 3x\" width=\"96\"\/><\/picture>\n<h3 class=\"more-topic__item-text\"> <span class=\"more-topic__item-text-clamp\"> Bank of Canada survey shows most businesses think it will take at least two years to get inflation under control <\/span> <\/h3>\n<\/li>\n<li class=\"more-topic__item\" data-carousel-item=\"\">  <picture class=\"more-topic__item-image\"><img decoding=\"async\" almost=\"\" alt=\"Nutrien Ltd. says it will increase potash output by \" amid=\"\" class=\"lazyload\" could=\"\" src=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/03\/potash-0317.jpg?h=96&amp;strip=all&amp;quality=80\" fears=\"\" food=\"\" global=\"\" height=\"96\" loading=\"lazy\" million=\"\" one=\"\" security.=\"\" shortages=\"\" srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/03\/potash-0317.jpg?h=96&amp;strip=all&amp;quality=80,&#10;                                    https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/03\/potash-0317.jpg?h=192&amp;strip=all&amp;quality=80 2x,&#10;                                    https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/03\/potash-0317.jpg?h=288&amp;strip=all&amp;quality=80 3x\" that=\"\" this=\"\" threaten=\"\" tonnes=\"\" width=\"96\" year=\"\"\/><\/picture>\n<h3 class=\"more-topic__item-text\"> <span class=\"more-topic__item-text-clamp\"> The Bank of Canada will almost certainly take the steeper path to higher rates next month <\/span> <\/h3>\n<\/li>\n<li class=\"more-topic__item\" data-carousel-item=\"\">  <picture class=\"more-topic__item-image\"><img decoding=\"async\" alt=\"None\" class=\"lazyload\" src=\"https:\/\/smartcdn.gprod.postmedia.digital\/nationalpost\/wp-content\/uploads\/2022\/01\/no0127inflation.jpeg?h=96&amp;strip=all&amp;quality=80\" height=\"96\" loading=\"lazy\" srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/nationalpost\/wp-content\/uploads\/2022\/01\/no0127inflation.jpeg?h=96&amp;strip=all&amp;quality=80,&#10;                                    https:\/\/smartcdn.gprod.postmedia.digital\/nationalpost\/wp-content\/uploads\/2022\/01\/no0127inflation.jpeg?h=192&amp;strip=all&amp;quality=80 2x,&#10;                                    https:\/\/smartcdn.gprod.postmedia.digital\/nationalpost\/wp-content\/uploads\/2022\/01\/no0127inflation.jpeg?h=288&amp;strip=all&amp;quality=80 3x\" width=\"96\"\/><\/picture>\n<h3 class=\"more-topic__item-text\"> <span class=\"more-topic__item-text-clamp\"> Inflation surges to 5.7%, adding pressure on Bank of Canada to accelerate rate hikes <\/span> <\/h3>\n<\/li>\n<\/ol>\n<p><button aria-hidden=\"true\" class=\"more-topic__button-next\" data-carousel-next=\"\" tabindex=\"-1\" title=\"next\" type=\"button\"\/> <\/section>\n<\/section>\n<div class=\"ad__section-border article-content__ad-group\">\n<section aria-describedby=\"advertisment2497512302735209830572543681743230\" class=\"ad\">\n<h2 class=\"visually-hidden\" id=\"advertisment2497512302735209830572543681743230\">Advertisement 5<\/h2>\n<div class=\"ad__container\">\n<div class=\"ad__inner\" id=\"ad__inner-5\">\n<div class=\"ad__inner__container\" data-ad=\"[[1200,250],[1200,90],[970,90],[970,250],[728,90],[300,250]]\" data-ad-loc=\"5\" data-ad-mobile=\"[[320,50],[300,50],[300,250]]\" id=\"ad-5\" style=\"--desktopHeight:250px;--mobileHeight:250px\">\n<div aria-hidden=\"true\" class=\"ad__placeholder\">\n<p> This advertisement has not loaded yet, but your article continues below. <\/p>\n<\/p><\/div><\/div><\/div><\/div>\n<\/section>\n<\/div>\n<section class=\"article-content__content-group\">\n<h2 class=\"visually-hidden\">Article content<\/h2>\n<p>It\u2019s hard to criticize the Bank of Canada governor for failing to foresee a war in Europe. But that\u2019s what happened, and now he must contend with an emergency stimulus program that worked so well that little of the scarring that typically occurs during a recession happened this time.<\/p>\n<p>As a result, the economy came out of the downturn firing on all cylinders. That\u2019s creating more demand than there is supply, putting extra pressure on prices amid a war, drought, COVID lockdowns, and sundry other disruptions that have already put upward pressure on prices.<\/p>\n<p>The Bank of Canada emphasized that it is far from finished. Its new forecast discovered that the economy is probably now operating at a level that exceeds estimates of what it can produce without stoking inflation. And yet the benchmark rate is still below its pre-pandemic level.<\/p>\n<p>A second half-point increase when the central bank next updates its policy rate on June 1 would surprise no one.<\/p>\n<p>Policy-makers said they are worried that households and businesses will absorb current inflation as the new normal. The Bank of Canada is relying on its credibility with the public to keep expectations anchored.<\/p>\n<p>The thing about expectations is that every once in a while, you have to back up your words with actions. For Canada\u2019s central bank, this is probably one of those times.<\/p>\n<p data-async=\"\"><em>\u2022 Email: kcarmichael@postmedia.com | Twitter: <a class=\"twitter-follow-button\" data-evt=\"click\" data-evt-typ=\"click\" data-evt-val=\"{\" control_fields=\"\" link=\"\" href=\"https:\/\/twitter.com\/carmichaelkevin\" rel=\"nofollow noopener\" target=\"_blank\">CarmichaelKevin<\/a><\/em><\/p>\n<\/section>\n<section class=\"article-content__share-group article-delimiter\" data-evt=\"beforeunload\" data-evt-typ=\"page_scroll\" data-evt-val=\"{\" control_fields=\"\">\n<h2 class=\"visually-hidden\">Share this article in your social network<\/h2>\n<\/section>\n<div class=\"article-content__ad-group\">\n<div class=\"ad__section-border ad__section-border--category visually-hidden\">\n<section aria-describedby=\"advertisment1668593931415048852516875373968018\" class=\"ad\">\n<h2 class=\"visually-hidden\" id=\"advertisment1668593931415048852516875373968018\">Advertisement <\/h2>\n<div class=\"ad__container\">\n<div class=\"ad__inner\" id=\"ad__inner-acceptable\">\n<div class=\"ad__inner__container\" data-ad=\"[[1200,250],[1200,90],[970,90],[970,250],[728,90],[300,250]]\" data-ad-acceptable=\"\" data-ad-loc=\"1\" data-ad-mobile=\"[[320,50],[300,50],[300,250]]\" id=\"ad-acceptable\" style=\"--desktopHeight:250px;--mobileHeight:250px\">\n<div aria-hidden=\"true\" class=\"ad__placeholder\">\n<p> This advertisement has not loaded yet, but your article continues below. <\/p>\n<\/p><\/div><\/div><\/div><\/div>\n<\/section>\n<\/div><\/div>\n<div class=\"widget article-content__widget-group article-content__widget-group--slot1\">\n<section aria-labelledby=\"FinancialPostTopStories8423398195104990124469309765963203\" class=\"newsletter-widget fp-headlinenews\" data-account-id=\"b9d3df2fccd108b5eff3c44f573b2cd6\" data-newsletter=\"single\" data-newsletter-component=\"\" data-target-list=\"FP_HeadlineNews\" data-widget=\"newsletter\"><img decoding=\"async\" alt=\"Top Stories Newsletter logo\" class=\"newsletter-widget__logo newsletter-widget__logo--FP_HeadlineNews\" height=\"80\" loading=\"lazy\" src=\"https:\/\/storage.googleapis.com\/pmd-stage-northamerica-northeast1-dcs-static-files\/10.2.2\/websites\/images\/newsletters\/logo\/newsletter-envelope.svg\" width=\"97\"\/><\/p>\n<div class=\"newsletter-widget__body\">\n<h2 class=\"newsletter-widget__title\" id=\"FinancialPostTopStories8423398195104990124469309765963203\">Financial Post Top Stories<\/h2>\n<p class=\"newsletter-widget__text\">Sign up to receive the daily top stories from the Financial Post, a division of Postmedia Network Inc.<\/p>\n<div class=\"js-replace-main\">  <small class=\"newsletter-widget__disclaimer text-size--micro\"> By clicking on the sign up button you consent to receive the above newsletter from Postmedia Network Inc. 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Please try again <\/p>\n<\/p><\/div>\n<\/section>\n<\/div>\n<footer aria-label=\"Article Comments\" class=\"article-footer\">\n<section class=\"comments__section\" id=\"comments\">\n<h3 class=\"widget-title comments-anchor\" id=\"comments-area\">Comments<\/h3>\n<p class=\"comments__section-disclaimer\"> Postmedia is committed to maintaining a lively but civil forum for discussion and encourage all readers to share their views on our articles. Comments may take up to an hour for moderation before appearing on the site. We ask you to keep your comments relevant and respectful. We have enabled email notifications\u2014you will now receive an email if you receive a reply to your comment, there is an update to a comment thread you follow or if a user you follow comments. Visit our Community Guidelines for more information and details on how to adjust your email settings. <\/p>\n<\/section>\n<\/footer>\n<\/div>\n<p><script async src=\"\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><br \/>\n<br \/>\n<br \/>Bank of Canada is far from finished hiking interest rates<\/a><br \/>\n<br \/>2022-04-13 16:45:15<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Breadcrumb Trail Links News FP Economy Canada&#8217;s economy is firing on all cylinders; unfortunately so is inflation Publishing date: Apr 13, 2022 \u00a0\u2022\u00a0 26\u00a0minutes ago \u00a0\u2022\u00a0 3 minute read \u00a0\u2022\u00a0&#8230;<\/p>\n","protected":false},"author":2,"featured_media":20674,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[31],"tags":[],"class_list":["post-20673","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy"],"_links":{"self":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/posts\/20673","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/comments?post=20673"}],"version-history":[{"count":0,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/posts\/20673\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/media\/20674"}],"wp:attachment":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/media?parent=20673"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/categories?post=20673"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/tags?post=20673"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}