{"id":8682,"date":"2021-04-08T20:45:38","date_gmt":"2021-04-08T20:45:38","guid":{"rendered":"https:\/\/www.pantheregroup.com\/2021\/04\/08\/safeguards-needed-to-protect-households-from-rising-interest-rates-if-inflation-kicks-in-cibcs-dodig-says\/"},"modified":"2021-04-08T20:45:38","modified_gmt":"2021-04-08T20:45:38","slug":"safeguards-needed-to-protect-households-from-rising-interest-rates-if-inflation-kicks-in-cibcs-dodig-says","status":"publish","type":"post","link":"https:\/\/www.pantheregroup.com\/2021\/04\/08\/safeguards-needed-to-protect-households-from-rising-interest-rates-if-inflation-kicks-in-cibcs-dodig-says\/","title":{"rendered":"Safeguards needed to protect households from rising interest rates if inflation kicks in, CIBC&#8217;s Dodig says"},"content":{"rendered":"<p> \n<\/p>\n<div id=\"\">\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 Finance <\/li>\n<li class=\"breadcrumbs__item\"> Economy <\/li>\n<li class=\"breadcrumbs__item\"> Banking <\/li>\n<\/ol>\n<\/nav>\n<p class=\"article-subtitle\"> Decision-makers need to look beyond the pandemic-ravaged economy&#8217;s initial rebound and plan for longer-term effects <\/p>\n<div class=\"article-meta\">\n<div class=\"published-by\">\n<p>Author of the article:<\/p>\n<p> <span class=\"published-by__author\">Stefanie Marotta<\/span> <\/div>\n<div class=\"published-date\">\n<p>Publishing date:<\/p>\n<p> <span class=\"published-date__since\">Apr 08, 2021<\/span> \u00a0\u2022\u00a0 <span class=\"updated-date__since\">9\u00a0hours ago<\/span> \u00a0\u2022\u00a0 <span class=\"published-date__word-count\">2 minute read<\/span> \u00a0\u2022\u00a0 <span>  <span class=\"comment-bubble\"> <svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" height=\"16px\" viewbox=\"0 0 24 24\" width=\"16px\"><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> 6 Comments  <\/span> <\/div><\/div>\n<figure class=\"featured-image\"><picture class=\"featured-image__ratio featured-image-category__economy\"><source media=\"(min-width: 1200px)\" srcset=\"https:\/\/smartcdn.prod.postmedia.digital\/financialpost\/wp-content\/uploads\/2021\/04\/vw0408cash.jpg?quality=90&amp;strip=all&amp;w=564&amp;type=webp,&#10;            https:\/\/smartcdn.prod.postmedia.digital\/financialpost\/wp-content\/uploads\/2021\/04\/vw0408cash.jpg?quality=90&amp;strip=all&amp;w=1128&amp;type=webp 2x\" type=\"image\/webp\"\/><source media=\"(min-width: 1200px)\" srcset=\"https:\/\/smartcdn.prod.postmedia.digital\/financialpost\/wp-content\/uploads\/2021\/04\/vw0408cash.jpg?quality=90&amp;strip=all&amp;w=564&amp;type=jpg,&#10;            https:\/\/smartcdn.prod.postmedia.digital\/financialpost\/wp-content\/uploads\/2021\/04\/vw0408cash.jpg?quality=90&amp;strip=all&amp;w=1128&amp;type=jpg 2x\" type=\"image\/jpeg\"\/><source media=\"(min-width: 768px)\" srcset=\"https:\/\/smartcdn.prod.postmedia.digital\/financialpost\/wp-content\/uploads\/2021\/04\/vw0408cash.jpg?quality=90&amp;strip=all&amp;w=472&amp;type=webp,&#10;            https:\/\/smartcdn.prod.postmedia.digital\/financialpost\/wp-content\/uploads\/2021\/04\/vw0408cash.jpg?quality=90&amp;strip=all&amp;w=944&amp;type=webp 2x\" type=\"image\/webp\"\/><source media=\"(min-width: 768px)\" srcset=\"https:\/\/smartcdn.prod.postmedia.digital\/financialpost\/wp-content\/uploads\/2021\/04\/vw0408cash.jpg?quality=90&amp;strip=all&amp;w=472&amp;type=jpg,&#10;            https:\/\/smartcdn.prod.postmedia.digital\/financialpost\/wp-content\/uploads\/2021\/04\/vw0408cash.jpg?quality=90&amp;strip=all&amp;w=944&amp;type=jpg 2x\" type=\"image\/jpeg\"\/><source media=\"(max-width: 767px)\" srcset=\"https:\/\/smartcdn.prod.postmedia.digital\/financialpost\/wp-content\/uploads\/2021\/04\/vw0408cash.jpg?quality=90&amp;strip=all&amp;w=288&amp;type=webp,&#10;            https:\/\/smartcdn.prod.postmedia.digital\/financialpost\/wp-content\/uploads\/2021\/04\/vw0408cash.jpg?quality=90&amp;strip=all&amp;w=576&amp;type=webp 2x\" type=\"image\/webp\"\/><\/picture><figcaption class=\"featured-image__caption image-caption\"><span class=\"caption\">Canadians have tucked away $180 billion in precautionary savings during the pandemic, and that extra spending power is expected to boost the economy when restrictions are lifted.<\/span> <span class=\"credit\">Photo by Getty Images\/iStockphoto<\/span> <\/figcaption><\/figure>\n<\/div>\n<div id=\"\">\n<h2 class=\"visually-hidden\">Article content<\/h2>\n<p>Canadian Imperial Bank of Commerce chief executive Victor Dodig expects the economy will recover quickly as COVID-19 restrictions ease, but that policymakers will need to implement safeguards to protect households and businesses from rising interest rates.<\/p>\n<p>Dodig echoed the sentiment of many economists and financial executives during the bank\u2019s annual meeting on Thursday, saying that Canada\u2019s decision-makers need to look beyond the pandemic-ravaged economy\u2019s initial rebound and plan for longer-term effects.<\/p>\n<p>Pandemic restrictions have prevented Canadians from spending money and an influx of funds from government support programs along with the uncertain economic climate have led many to boost their savings.<\/p>\n<p>The Bank of Canada said in March that Canadians had tucked away $180 billion in precautionary savings during the pandemic, as average disposable incomes increased by an extra $1,800 while spending fell by about $4,000.<\/p>\n<\/p><\/div>\n<div id=\"\">\n<h2 class=\"visually-hidden\">Article content<\/h2>\n<p>That extra spending power will give the economy a boost, once restrictions are lifted.<\/p>\n<p>\u201cThis will help businesses recover lost ground, notably in services that have been unavailable during the pandemic,\u201d Dodig said.<\/p>\n<figure class=\"embedded-image\"><picture class=\"embedded-image__ratio\"><source data-srcset=\"https:\/\/smartcdn.prod.postmedia.digital\/financialpost\/wp-content\/uploads\/2021\/04\/vw0408dodig.jpg?quality=90&amp;strip=all&amp;w=564&amp;type=webp,&#10;            https:\/\/smartcdn.prod.postmedia.digital\/financialpost\/wp-content\/uploads\/2021\/04\/vw0408dodig.jpg?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.prod.postmedia.digital\/financialpost\/wp-content\/uploads\/2021\/04\/vw0408dodig.jpg?quality=90&amp;strip=all&amp;w=564&amp;type=jpg,&#10;            https:\/\/smartcdn.prod.postmedia.digital\/financialpost\/wp-content\/uploads\/2021\/04\/vw0408dodig.jpg?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.prod.postmedia.digital\/financialpost\/wp-content\/uploads\/2021\/04\/vw0408dodig.jpg?quality=90&amp;strip=all&amp;w=472&amp;type=webp,&#10;            https:\/\/smartcdn.prod.postmedia.digital\/financialpost\/wp-content\/uploads\/2021\/04\/vw0408dodig.jpg?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.prod.postmedia.digital\/financialpost\/wp-content\/uploads\/2021\/04\/vw0408dodig.jpg?quality=90&amp;strip=all&amp;w=472&amp;type=jpg,&#10;            https:\/\/smartcdn.prod.postmedia.digital\/financialpost\/wp-content\/uploads\/2021\/04\/vw0408dodig.jpg?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.prod.postmedia.digital\/financialpost\/wp-content\/uploads\/2021\/04\/vw0408dodig.jpg?quality=90&amp;strip=all&amp;w=288&amp;type=webp,&#10;            https:\/\/smartcdn.prod.postmedia.digital\/financialpost\/wp-content\/uploads\/2021\/04\/vw0408dodig.jpg?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=\"Canadian Imperial Bank of Commerce chief executive Victor Dodig.\" class=\"embedded-image__image lazyload\" src=\"https:\/\/smartcdn.prod.postmedia.digital\/financialpost\/wp-content\/uploads\/2021\/04\/vw0408dodig.jpg?quality=90&amp;strip=all&amp;w=288\" srcset=\"https:\/\/smartcdn.prod.postmedia.digital\/financialpost\/wp-content\/uploads\/2021\/04\/vw0408dodig.jpg?quality=90&amp;strip=all&amp;w=288,&#10;                https:\/\/smartcdn.prod.postmedia.digital\/financialpost\/wp-content\/uploads\/2021\/04\/vw0408dodig.jpg?quality=90&amp;strip=all&amp;w=576 2x\" height=\"750\" loading=\"lazy\" width=\"1000\"\/><\/picture><figcaption class=\"image-caption\"><span class=\"caption\"> Canadian Imperial Bank of Commerce chief executive Victor Dodig.<\/span> <span class=\"credit\">Photo by Fred Chartrand\/The Canadian Press files<\/span> <\/figcaption><\/figure>\n<p>But a surge in spending could trigger inflation and force policymakers to raise interest rates, making debt more expensive to manage relative to the current ultra-low-interest-rate environment.<\/p>\n<p>\u201cThat could make the challenge of managing higher pandemic-induced debt loads that much greater for governments, corporations and consumers alike,\u201d Dodig said.<\/p>\n<p>CIBC economists forecast that Canadian GDP will grow 5.5 per cent in 2021, slower than estimates of U.S. growth at six per cent due to the faster vaccine rollout south of the border.<\/p>\n<section aria-labelledby=\"moreTopicLabel6589828953737168110654391179308891\" class=\"more-topic\" 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=\"Non-energy commodities such as lumber and canola have been driving the trade recovery.\" class=\"lazyload\" src=\"https:\/\/smartcdn.prod.postmedia.digital\/financialpost\/wp-content\/uploads\/2021\/04\/canola0407.jpg?h=96&amp;strip=all&amp;quality=80\" height=\"96\" loading=\"lazy\" srcset=\"https:\/\/smartcdn.prod.postmedia.digital\/financialpost\/wp-content\/uploads\/2021\/04\/canola0407.jpg?h=96&amp;strip=all&amp;quality=80,&#10;                                    https:\/\/smartcdn.prod.postmedia.digital\/financialpost\/wp-content\/uploads\/2021\/04\/canola0407.jpg?h=192&amp;strip=all&amp;quality=80 2x,&#10;                                    https:\/\/smartcdn.prod.postmedia.digital\/financialpost\/wp-content\/uploads\/2021\/04\/canola0407.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\"> How the often neglected hewers of wood and drawers of water are saving Canada some pain <\/span><\/h3>\n<\/li>\n<li class=\"more-topic__item\" data-carousel-item=\"\"><picture class=\"more-topic__item-image\"><img decoding=\"async\" alt=\"The Canadian housing market is at a fever pitch, with prices shooting up amid relatively low interest rates and bids among buyers for more space.\u00a0\" class=\"lazyload\" src=\"https:\/\/smartcdn.prod.postmedia.digital\/financialpost\/wp-content\/uploads\/2021\/04\/vw0407homes.jpg?h=96&amp;strip=all&amp;quality=80\" height=\"96\" loading=\"lazy\" srcset=\"https:\/\/smartcdn.prod.postmedia.digital\/financialpost\/wp-content\/uploads\/2021\/04\/vw0407homes.jpg?h=96&amp;strip=all&amp;quality=80,&#10;                                    https:\/\/smartcdn.prod.postmedia.digital\/financialpost\/wp-content\/uploads\/2021\/04\/vw0407homes.jpg?h=192&amp;strip=all&amp;quality=80 2x,&#10;                                    https:\/\/smartcdn.prod.postmedia.digital\/financialpost\/wp-content\/uploads\/2021\/04\/vw0407homes.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\"> BMO chief executive urges policymakers to watch, but wait, on housing intervention <\/span><\/h3>\n<\/li>\n<li class=\"more-topic__item\" data-carousel-item=\"\"><picture class=\"more-topic__item-image\"><img decoding=\"async\" alt=\"The COVID-19 pandemic has hit jobs and sectors that historically have fared better during hard economic times.\" class=\"lazyload\" src=\"https:\/\/smartcdn.prod.postmedia.digital\/nationalpost\/wp-content\/uploads\/2021\/04\/postpandemic-kevin-carmichael.jpeg?h=96&amp;strip=all&amp;quality=80\" height=\"96\" loading=\"lazy\" srcset=\"https:\/\/smartcdn.prod.postmedia.digital\/nationalpost\/wp-content\/uploads\/2021\/04\/postpandemic-kevin-carmichael.jpeg?h=96&amp;strip=all&amp;quality=80,&#10;                                    https:\/\/smartcdn.prod.postmedia.digital\/nationalpost\/wp-content\/uploads\/2021\/04\/postpandemic-kevin-carmichael.jpeg?h=192&amp;strip=all&amp;quality=80 2x,&#10;                                    https:\/\/smartcdn.prod.postmedia.digital\/nationalpost\/wp-content\/uploads\/2021\/04\/postpandemic-kevin-carmichael.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\"> The pandemic exposed flaws in Canada\u2019s economic system. Fixing them won\u2019t be easy <\/span><\/h3>\n<\/li>\n<li class=\"more-topic__item\" data-carousel-item=\"\"><picture class=\"more-topic__item-image\"><img decoding=\"async\" alt=\"There was a surge in the level of household savings in 2020, estimated by the Bank of Canada to be about $180 billion, or roughly $5,800 per person.\" class=\"lazyload\" src=\"https:\/\/smartcdn.prod.postmedia.digital\/financialpost\/wp-content\/uploads\/2021\/04\/cash0401.jpg?h=96&amp;strip=all&amp;quality=80\" height=\"96\" loading=\"lazy\" srcset=\"https:\/\/smartcdn.prod.postmedia.digital\/financialpost\/wp-content\/uploads\/2021\/04\/cash0401.jpg?h=96&amp;strip=all&amp;quality=80,&#10;                                    https:\/\/smartcdn.prod.postmedia.digital\/financialpost\/wp-content\/uploads\/2021\/04\/cash0401.jpg?h=192&amp;strip=all&amp;quality=80 2x,&#10;                                    https:\/\/smartcdn.prod.postmedia.digital\/financialpost\/wp-content\/uploads\/2021\/04\/cash0401.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\"> TD Bank CEO pushes for policies to spur cash-flush consumers to spend locally <\/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<p>Some observers have called for stimulus programs to aid with the recovery. A March survey by KPMG found that seventy-seven per cent of people believe the government should conduct a major economic stimulus program, a drop from 82 per cent in January. Dodig said that any such effort aimed at digging the country out of a recession should also consider potential negative effects in the years to come.<\/p>\n<p>\u201cAny stimulus measures being considered to help drive the recovery should be focused on long-term growth rather than short-term consumption,\u201d Dodig said.<\/p>\n<p>In particular, he said the government should create deeper capital pools and allow startups to scale without leaving Canada.<\/p>\n<p><em>Financial Post<\/em><\/p>\n<p data-async=\"\"><em>\u2022 Email: smarotta@postmedia.com | Twitter: <a class=\"twitter-follow-button\" data-evt=\"click\" data-evt-typ=\"User Interaction Click\" data-evt-val=\"{\" control_fields=\"\" source=\"\" type=\"\" name=\"\" target=\"\" url=\"\" vertical=\"\" position=\"\" pixels=\"\" link=\"\" href=\"https:\/\/twitter.com\/StefanieMarotta\" rel=\"noopener nofollow\">StefanieMarotta<\/a><\/em><\/p>\n<\/p><\/div>\n<p><script async src=\"\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><br \/>\n<br \/>\n<br \/>Safeguards needed to protect households from rising interest rates if inflation kicks in, CIBC&#8217;s Dodig says<\/a><br \/>\n<br \/>2021-04-08 20:45:38<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Breadcrumb Trail Links News FP Finance Economy Banking Decision-makers need to look beyond the pandemic-ravaged economy&#8217;s initial rebound and plan for longer-term effects Author of the article: Stefanie Marotta Publishing&#8230;<\/p>\n","protected":false},"author":2,"featured_media":8683,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[31],"tags":[],"class_list":{"0":"post-8682","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy"},"_links":{"self":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/posts\/8682","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=8682"}],"version-history":[{"count":0,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/posts\/8682\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/media\/8683"}],"wp:attachment":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/media?parent=8682"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/categories?post=8682"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/tags?post=8682"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}