{"id":22400,"date":"2022-06-02T16:05:45","date_gmt":"2022-06-02T16:05:45","guid":{"rendered":"https:\/\/www.pantheregroup.com\/2022\/06\/02\/bank-of-canadas-paul-beaudry-suggests-benchmark-rate-could-top-3\/"},"modified":"2022-06-02T16:05:45","modified_gmt":"2022-06-02T16:05:45","slug":"bank-of-canadas-paul-beaudry-suggests-benchmark-rate-could-top-3","status":"publish","type":"post","link":"https:\/\/www.pantheregroup.com\/2022\/06\/02\/bank-of-canadas-paul-beaudry-suggests-benchmark-rate-could-top-3\/","title":{"rendered":"Bank of Canada&#8217;s Paul Beaudry suggests benchmark rate could top 3%"},"content":{"rendered":"<div style=\"text-align:center\"><\/div><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\"> Kevin Carmichael: Inflation unprecedented since the central bank adopted the index as its guide for policy in 1991 <\/p>\n<figure class=\"featured-image\"><picture class=\"featured-image__ratio\"><\/picture><figcaption class=\"featured-image__caption image-caption\"><span class=\"caption\">The Bank of Canada on June 1 raised its benchmark interest rate a half point to 1.5 per cent, the highest since 2019.<\/span> <span class=\"credit\">Photo by Justin Tang\/Bloomberg<\/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 appears to have concluded that it will need to lift its benchmark interest rate to at least three per cent to keep inflation from becoming entrenched.<\/p>\n<\/section>\n<div class=\"ad__section-border article-content__ad-group\">\n<section aria-describedby=\"advertisment1276312726248889032887864444017836\" class=\"ad\">\n<h2 class=\"visually-hidden\" id=\"advertisment1276312726248889032887864444017836\">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=\"\">Canada\u2019s benchmark rate is currently 1.5 per cent following a half-point increase on June 1.<\/p>\n<p>That\u2019s a quarter-point shy of the pre-pandemic rate of 1.75 per cent, which was as high as policymakers managed to push the rate during the tortured recovery that followed the Great Recession. The economy never really gathered significant momentum over the decade that followed the 2008-09 financial crisis, precipitating an environment of weak inflation that left central bankers looking over their shoulders for a re-emergence of deflationary forces.<\/p>\n<p>But, as Paul Beaudry, one of the central bank\u2019s deputy governors, said in a speech on June 2, the \u201csituation today is totally different.\u201d<\/p>\n<p data-async=\"\">The consumer price index never increased more than 3.7 per cent on a year-over-year basis between 2010 and 2020. In April, the index surged 6.8 per cent, the second-biggest increase since the early 1980s. Inflation has now exceeded the high end of the Bank of Canada\u2019s comfort zone of one per cent to three per cent for 12 consecutive months, unprecedented since the central bank adopted the index as its guide for policy in 1991.<\/p>\n<\/section>\n<div class=\"ad__section-border article-content__ad-group\">\n<section aria-describedby=\"advertisment4274266846062026975856869876382839\" class=\"ad\">\n<h2 class=\"visually-hidden\" id=\"advertisment4274266846062026975856869876382839\">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<p>\u201cPrice pressures are broadening and inflation is much higher than we expected and likely to go higher still before easing,\u201d Beaudry said.<\/p>\n<p data-async=\"\">The Bank of Canada\u00a0earlier this week observed that all the inflation gauges it watches to separate \u201ccore\u201d prices from the volatile swings in the cost of food and energy now exceed three per cent. That\u2019s a problem for households who must suddenly cope with a higher cost of living. Policymakers have an additional problem in that their credibility is on the line, since their mandate is to keep the consumer price index advancing at an annual rate of about two per cent.<\/p>\n<p>The Bank of Canada this week has hardened its message about its resolve to crush inflation, even if that means testing the country\u2019s willingness to accept an economic downturn to contain upward price pressures.<\/p>\n<\/section>\n<div class=\"ad__section-border article-content__ad-group\">\n<section aria-describedby=\"advertisment9119905832648885770210605485441356\" class=\"ad\">\n<h2 class=\"visually-hidden\" id=\"advertisment9119905832648885770210605485441356\">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<p>There are several examples of this resolve, including the Bank of Canada\u2019s suggestion that its latest economic outlook probably understates inflation, and its acknowledgement that it\u2019s worried about inflationary expectations becoming \u201centrenched.\u201d<\/p>\n<p>But perhaps the clearest signal of a shift was Beaudry\u2019s guidance in his speech to the Gatineau Chamber of Commerce that the policy rate probably will need to go outside its neutral range to restrain economic growth. \u201cNeutral\u201d is a theoretical rate that neither stokes or chokes economic growth. The Bank of Canada estimates this country\u2019s neutral rate is between two per cent and three per cent.<\/p>\n<p>The spreading of inflationary pressures suggests taming them will require choking demand.<\/p>\n<\/section>\n<div class=\"ad__section-border article-content__ad-group\">\n<section aria-describedby=\"advertisment1686288139045587539828281400519589\" class=\"ad\">\n<h2 class=\"visually-hidden\" id=\"advertisment1686288139045587539828281400519589\">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>\u201cThis raises the likelihood that we may need to raise the policy rate to the top end or above the neutral range to bring demand and supply into balance and keep expectations well anchored,\u201d Beaudry said.<\/p>\n<p>Many on Bay Street have already concluded that the Bank of Canada will need to take its benchmark rate above three per cent to get inflation under control. Those observers reckon the central bank was late starting on a path to higher interest rates, so it will have to work that much harder to douse inflationary pressures.<\/p>\n<p>Beaudry acknowledged that inflation has \u201cconsistently exceeded our forecasts,\u201d and said policymakers will present an \u201cinitial analysis\u201d of their forecasting errors when they release their next quarterly economic outlook next month.<\/p>\n<\/section>\n<div class=\"ad__section-border article-content__ad-group\">\n<section aria-describedby=\"advertisment1152981891993330087175810605325416\" class=\"ad\">\n<h2 class=\"visually-hidden\" id=\"advertisment1152981891993330087175810605325416\">Advertisement 6<\/h2>\n<div class=\"ad__container\">\n<div class=\"ad__inner\" id=\"ad__inner-6\">\n<div class=\"ad__inner__container\" data-ad=\"[[1200,250],[1200,90],[970,90],[970,250],[728,90],[300,250]]\" data-ad-loc=\"6\" data-ad-mobile=\"[[320,50],[300,50],[300,250]]\" id=\"ad-6\" 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>Evidence that the central bank is attempting to learn from its mistakes could shore up confidence in the institution, especially among the critics who think central bankers are out of touch with reality. A transparent analysis of what went wrong could offset criticism that the central bank was blinded by arrogance and didn\u2019t simply make an honest mistake.<\/p>\n<p>Beaudry insisted the miss on inflation was rooted in the latter. He said in the speech that the sort of commodity price spikes that came with the recovery from the pandemic tend to be temporary. Therefore, with the economy recovering from an epic crash, and waves of COVID-19 still a present threat to growth, policymakers opted to err on the side of stimulus.<\/p>\n<section aria-labelledby=\"moreTopicLabel124569733386917920274530358919276\" 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\" src=\"data:image\/gif;base64,R0lGODlhAQABAIAAAAAAAP\/\/\/ywAAAAAAQABAAACAUwAOw==\" fifu-lazy=\"1\" fifu-data-sizes=\"auto\" fifu-data-srcset=\"https:\/\/i2.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/06\/tiff-macklem-0531.jpg?h=96&strip=all&quality=80&ssl=1&w=75&resize=75&ssl=1 75w, https:\/\/i2.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/06\/tiff-macklem-0531.jpg?h=96&strip=all&quality=80&ssl=1&w=100&resize=100&ssl=1 100w, https:\/\/i2.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/06\/tiff-macklem-0531.jpg?h=96&strip=all&quality=80&ssl=1&w=150&resize=150&ssl=1 150w, https:\/\/i2.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/06\/tiff-macklem-0531.jpg?h=96&strip=all&quality=80&ssl=1&w=240&resize=240&ssl=1 240w, https:\/\/i2.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/06\/tiff-macklem-0531.jpg?h=96&strip=all&quality=80&ssl=1&w=320&resize=320&ssl=1 320w, https:\/\/i2.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/06\/tiff-macklem-0531.jpg?h=96&strip=all&quality=80&ssl=1&w=500&resize=500&ssl=1 500w, https:\/\/i2.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/06\/tiff-macklem-0531.jpg?h=96&strip=all&quality=80&ssl=1&w=640&resize=640&ssl=1 640w, https:\/\/i2.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/06\/tiff-macklem-0531.jpg?h=96&strip=all&quality=80&ssl=1&w=800&resize=800&ssl=1 800w, https:\/\/i2.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/06\/tiff-macklem-0531.jpg?h=96&strip=all&quality=80&ssl=1&w=1024&resize=1024&ssl=1 1024w, https:\/\/i2.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/06\/tiff-macklem-0531.jpg?h=96&strip=all&quality=80&ssl=1&w=1280&resize=1280&ssl=1 1280w, https:\/\/i2.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/06\/tiff-macklem-0531.jpg?h=96&strip=all&quality=80&ssl=1&w=1600&resize=1600&ssl=1 1600w\" alt=\"Bank of Canada Governor Tiff Macklem. \" class=\"lazyload\" fifu-data-src=\"https:\/\/i2.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/06\/tiff-macklem-0531.jpg?h=96&strip=all&quality=80&ssl=1\" height=\"96\" loading=\"lazy\" srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/06\/tiff-macklem-0531.jpg?h=96&strip=all&quality=80,\n                                    https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/06\/tiff-macklem-0531.jpg?h=192&strip=all&quality=80 2x,\n                                    https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/06\/tiff-macklem-0531.jpg?h=288&strip=all&quality=80 3x\" width=\"96\"\/><\/picture>\n<h3 class=\"more-topic__item-text\"> <span class=\"more-topic__item-text-clamp\"> Bank of Canada raises rate half a point to 1.5%, signals more hikes to come <\/span> <\/h3>\n<\/li>\n<li class=\"more-topic__item\" data-carousel-item=\"\">  <picture class=\"more-topic__item-image\"><img decoding=\"async\" src=\"data:image\/gif;base64,R0lGODlhAQABAIAAAAAAAP\/\/\/ywAAAAAAQABAAACAUwAOw==\" fifu-lazy=\"1\" fifu-data-sizes=\"auto\" fifu-data-srcset=\"https:\/\/i0.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/05\/canada-gdp-0531.jpg?h=96&strip=all&quality=80&ssl=1&w=75&resize=75&ssl=1 75w, https:\/\/i0.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/05\/canada-gdp-0531.jpg?h=96&strip=all&quality=80&ssl=1&w=100&resize=100&ssl=1 100w, https:\/\/i0.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/05\/canada-gdp-0531.jpg?h=96&strip=all&quality=80&ssl=1&w=150&resize=150&ssl=1 150w, https:\/\/i0.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/05\/canada-gdp-0531.jpg?h=96&strip=all&quality=80&ssl=1&w=240&resize=240&ssl=1 240w, https:\/\/i0.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/05\/canada-gdp-0531.jpg?h=96&strip=all&quality=80&ssl=1&w=320&resize=320&ssl=1 320w, https:\/\/i0.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/05\/canada-gdp-0531.jpg?h=96&strip=all&quality=80&ssl=1&w=500&resize=500&ssl=1 500w, https:\/\/i0.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/05\/canada-gdp-0531.jpg?h=96&strip=all&quality=80&ssl=1&w=640&resize=640&ssl=1 640w, https:\/\/i0.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/05\/canada-gdp-0531.jpg?h=96&strip=all&quality=80&ssl=1&w=800&resize=800&ssl=1 800w, https:\/\/i0.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/05\/canada-gdp-0531.jpg?h=96&strip=all&quality=80&ssl=1&w=1024&resize=1024&ssl=1 1024w, https:\/\/i0.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/05\/canada-gdp-0531.jpg?h=96&strip=all&quality=80&ssl=1&w=1280&resize=1280&ssl=1 1280w, https:\/\/i0.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/05\/canada-gdp-0531.jpg?h=96&strip=all&quality=80&ssl=1&w=1600&resize=1600&ssl=1 1600w\" alt=\"Canada's economy grew 3.1 per cent in the first quarter, falling short of expectations.\n\" class=\"lazyload\" fifu-data-src=\"https:\/\/i0.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/05\/canada-gdp-0531.jpg?h=96&strip=all&quality=80&ssl=1\" height=\"96\" loading=\"lazy\" srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/05\/canada-gdp-0531.jpg?h=96&strip=all&quality=80,\n                                    https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/05\/canada-gdp-0531.jpg?h=192&strip=all&quality=80 2x,\n                                    https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/05\/canada-gdp-0531.jpg?h=288&strip=all&quality=80 3x\" width=\"96\"\/><\/picture>\n<h3 class=\"more-topic__item-text\"> <span class=\"more-topic__item-text-clamp\"> Canada&#8217;s economic growth slows to 3.1%: What you need to know <\/span> <\/h3>\n<\/li>\n<li class=\"more-topic__item\" data-carousel-item=\"\">  <picture class=\"more-topic__item-image\"><img decoding=\"async\" src=\"data:image\/gif;base64,R0lGODlhAQABAIAAAAAAAP\/\/\/ywAAAAAAQABAAACAUwAOw==\" fifu-lazy=\"1\" fifu-data-sizes=\"auto\" fifu-data-srcset=\"https:\/\/i3.wp.com\/smartcdn.gprod.postmedia.digital\/nationalpost\/wp-content\/uploads\/2022\/04\/inflation-0420.jpg?h=96&strip=all&quality=80&ssl=1&w=75&resize=75&ssl=1 75w, https:\/\/i3.wp.com\/smartcdn.gprod.postmedia.digital\/nationalpost\/wp-content\/uploads\/2022\/04\/inflation-0420.jpg?h=96&strip=all&quality=80&ssl=1&w=100&resize=100&ssl=1 100w, https:\/\/i3.wp.com\/smartcdn.gprod.postmedia.digital\/nationalpost\/wp-content\/uploads\/2022\/04\/inflation-0420.jpg?h=96&strip=all&quality=80&ssl=1&w=150&resize=150&ssl=1 150w, https:\/\/i3.wp.com\/smartcdn.gprod.postmedia.digital\/nationalpost\/wp-content\/uploads\/2022\/04\/inflation-0420.jpg?h=96&strip=all&quality=80&ssl=1&w=240&resize=240&ssl=1 240w, https:\/\/i3.wp.com\/smartcdn.gprod.postmedia.digital\/nationalpost\/wp-content\/uploads\/2022\/04\/inflation-0420.jpg?h=96&strip=all&quality=80&ssl=1&w=320&resize=320&ssl=1 320w, https:\/\/i3.wp.com\/smartcdn.gprod.postmedia.digital\/nationalpost\/wp-content\/uploads\/2022\/04\/inflation-0420.jpg?h=96&strip=all&quality=80&ssl=1&w=500&resize=500&ssl=1 500w, https:\/\/i3.wp.com\/smartcdn.gprod.postmedia.digital\/nationalpost\/wp-content\/uploads\/2022\/04\/inflation-0420.jpg?h=96&strip=all&quality=80&ssl=1&w=640&resize=640&ssl=1 640w, https:\/\/i3.wp.com\/smartcdn.gprod.postmedia.digital\/nationalpost\/wp-content\/uploads\/2022\/04\/inflation-0420.jpg?h=96&strip=all&quality=80&ssl=1&w=800&resize=800&ssl=1 800w, https:\/\/i3.wp.com\/smartcdn.gprod.postmedia.digital\/nationalpost\/wp-content\/uploads\/2022\/04\/inflation-0420.jpg?h=96&strip=all&quality=80&ssl=1&w=1024&resize=1024&ssl=1 1024w, https:\/\/i3.wp.com\/smartcdn.gprod.postmedia.digital\/nationalpost\/wp-content\/uploads\/2022\/04\/inflation-0420.jpg?h=96&strip=all&quality=80&ssl=1&w=1280&resize=1280&ssl=1 1280w, https:\/\/i3.wp.com\/smartcdn.gprod.postmedia.digital\/nationalpost\/wp-content\/uploads\/2022\/04\/inflation-0420.jpg?h=96&strip=all&quality=80&ssl=1&w=1600&resize=1600&ssl=1 1600w\" alt=\"None\" class=\"lazyload\" fifu-data-src=\"https:\/\/i3.wp.com\/smartcdn.gprod.postmedia.digital\/nationalpost\/wp-content\/uploads\/2022\/04\/inflation-0420.jpg?h=96&strip=all&quality=80&ssl=1\" height=\"96\" loading=\"lazy\" srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/nationalpost\/wp-content\/uploads\/2022\/04\/inflation-0420.jpg?h=96&strip=all&quality=80,\n                                    https:\/\/smartcdn.gprod.postmedia.digital\/nationalpost\/wp-content\/uploads\/2022\/04\/inflation-0420.jpg?h=192&strip=all&quality=80 2x,\n                                    https:\/\/smartcdn.gprod.postmedia.digital\/nationalpost\/wp-content\/uploads\/2022\/04\/inflation-0420.jpg?h=288&strip=all&quality=80 3x\" width=\"96\"\/><\/picture>\n<h3 class=\"more-topic__item-text\"> <span class=\"more-topic__item-text-clamp\"> Canadian inflation rises to 6.8%: What you need to know <\/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=\"advertisment7193252365190372955616154095207740\" class=\"ad\">\n<h2 class=\"visually-hidden\" id=\"advertisment7193252365190372955616154095207740\">Advertisement 7<\/h2>\n<div class=\"ad__container\">\n<div class=\"ad__inner\" id=\"ad__inner-7\">\n<div class=\"ad__inner__container\" data-ad=\"[[1200,250],[1200,90],[970,90],[970,250],[728,90],[300,250]]\" data-ad-loc=\"7\" data-ad-mobile=\"[[320,50],[300,50],[300,250]]\" id=\"ad-7\" 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>\u201cThe risk seemed appropriate to take at the time, given the slack in the economy and the view that the supply-driven sources of elevated inflation would likely prove temporary,\u201d Beaudry said.<\/p>\n<p>\u201cThe situation today is notably different,\u201d he continued. \u201cThe Canadian economy is in excess demand. In addition, the initial disruptions to international supply chains have persisted longer and broadened more than we expected, partly reflecting strong demand in the world economy.\u201d<\/p>\n<p>Bottom line: \u201cThe risk is now greater that inflation expectations could de-anchor and high inflation could become entrenched.\u201d<\/p>\n<p>That\u2019s a central banker\u2019s worst nightmare. For years, the catchphrase of monetary policy was \u201clower for longer.\u201d It\u2019s time for a new one: higher, faster.<\/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<p> <iframe loading=\"lazy\" frameborder=\"0\" height=\"1200\" id=\"\" src=\"https:\/\/modules.wearehearken.com\/financial-post\/embed\/9439\/share\" style=\"--height: 1200px; \" width=\"\"><\/iframe> <\/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=\"advertisment3741159629268852606455568450569712\" class=\"ad\">\n<h2 class=\"visually-hidden\" id=\"advertisment3741159629268852606455568450569712\">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=\"FinancialPostTopStories3629857826324350477876305406624000\" 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\" src=\"data:image\/gif;base64,R0lGODlhAQABAIAAAAAAAP\/\/\/ywAAAAAAQABAAACAUwAOw==\" fifu-lazy=\"1\" fifu-data-sizes=\"auto\" fifu-data-srcset=\"https:\/\/dcs-static.gstage.postmedia.digital\/10.5.3\/websites\/images\/newsletters\/logo\/newsletter-envelope.svg 75w, https:\/\/dcs-static.gstage.postmedia.digital\/10.5.3\/websites\/images\/newsletters\/logo\/newsletter-envelope.svg 100w, https:\/\/dcs-static.gstage.postmedia.digital\/10.5.3\/websites\/images\/newsletters\/logo\/newsletter-envelope.svg 150w, https:\/\/dcs-static.gstage.postmedia.digital\/10.5.3\/websites\/images\/newsletters\/logo\/newsletter-envelope.svg 240w, https:\/\/dcs-static.gstage.postmedia.digital\/10.5.3\/websites\/images\/newsletters\/logo\/newsletter-envelope.svg 320w, https:\/\/dcs-static.gstage.postmedia.digital\/10.5.3\/websites\/images\/newsletters\/logo\/newsletter-envelope.svg 500w, https:\/\/dcs-static.gstage.postmedia.digital\/10.5.3\/websites\/images\/newsletters\/logo\/newsletter-envelope.svg 640w, https:\/\/dcs-static.gstage.postmedia.digital\/10.5.3\/websites\/images\/newsletters\/logo\/newsletter-envelope.svg 800w, https:\/\/dcs-static.gstage.postmedia.digital\/10.5.3\/websites\/images\/newsletters\/logo\/newsletter-envelope.svg 1024w, https:\/\/dcs-static.gstage.postmedia.digital\/10.5.3\/websites\/images\/newsletters\/logo\/newsletter-envelope.svg 1280w, https:\/\/dcs-static.gstage.postmedia.digital\/10.5.3\/websites\/images\/newsletters\/logo\/newsletter-envelope.svg 1600w\" alt=\"Top Stories Newsletter logo\" class=\"newsletter-widget__logo newsletter-widget__logo--FP_HeadlineNews\" height=\"80\" loading=\"lazy\" fifu-data-src=\"https:\/\/dcs-static.gstage.postmedia.digital\/10.5.3\/websites\/images\/newsletters\/logo\/newsletter-envelope.svg\" width=\"97\"\/><\/p>\n<div class=\"newsletter-widget__body\">\n<h2 class=\"newsletter-widget__title\" id=\"FinancialPostTopStories3629857826324350477876305406624000\">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. You may unsubscribe any time by clicking on the unsubscribe link at the bottom of our emails. Postmedia Network Inc. | 365 Bloor Street East, Toronto, Ontario, M4W 3L4 | 416-383-2300 <\/small> <\/div>\n<div class=\"js-submit-success\" hidden=\"\" id=\"submitSuccessFP_HeadlineNews\">\n<h3 class=\"newsletter__feedback--heading\">Thanks for signing up!<\/h3>\n<p class=\"newsletter-widget__text\">A welcome email is on its way. If you don&#8217;t see it, please check your junk folder.<\/p>\n<p class=\"newsletter-widget__text newsletter__feedback--last\">The next issue of Financial Post Top Stories will soon be in your inbox.<\/p>\n<\/p><\/div>\n<p class=\"newsletter-widget__text js-submit-error\" hidden=\"\" id=\"submitErrorFP_HeadlineNews\"> We encountered an issue signing you up. 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&#8217;s Paul Beaudry suggests benchmark rate could top 3%<\/a><br \/>\n<br \/>2022-06-02 16:05:45<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Breadcrumb Trail Links News FP Economy Kevin Carmichael: Inflation unprecedented since the central bank adopted the index as its guide for policy in 1991 The Bank of Canada on June&#8230;<\/p>\n","protected":false},"author":2,"featured_media":22401,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/06\/bank-of-canada-0602.jpg?quality=90&strip=all&w=288&h=216","fifu_image_alt":"","footnotes":""},"categories":[31],"tags":[],"class_list":["post-22400","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy"],"_links":{"self":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/posts\/22400","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=22400"}],"version-history":[{"count":0,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/posts\/22400\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/media\/22401"}],"wp:attachment":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/media?parent=22400"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/categories?post=22400"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/tags?post=22400"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}