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OTTAWA, April 27 (Reuters) – Canada’s economy is overheating, creating domestic inflationary pressures, and higher interest rates are needed to cool things down, the head of the Bank of Canada said on Wednesday.
Governor Tiff Macklem, testifying to a Senate committee, said interest rates may need to go above the neutral rate range – currently estimated to be between 2% and 3% – for a period of time to get inflation back to target.
“If you boil it down, the economy is overheating. That’s creating domestic inflationary pressures. We need to cool growth, to cool inflation,” Macklem said.
“It’s going to be delicate,” he added. “But we do need to raise interest rates to moderate that spending growth and get inflation back to target.”
The Bank of Canada increased interest rates by a rare 50 basis points earlier this month, and Macklem has signaled that the central bank will likely consider a second oversized hike at its next meeting, on June 1. read more
How high rates go will depend on how the economy responds to increases and on the inflation outlook, Macklem reiterated.
“It’s possible that we may have to go above the neutral rate for a period of time to return inflation to target, but it’s a bit above 2 or 3%, it’s not 7% or 8%,” he said, when pressed on whether rates could return to levels seen decades ago.
“That reflects the fact that inflation expectations are well anchored,” he added.
Canada’s inflation rate hit a 31-year high of 6.7% in March. read more
Reporting by Julie Gordon in Ottawa
Editing by Chris Reese and Leslie Adler
Our Standards: The Thomson Reuters Trust Principles.
TORONTO – Strength in the base metal and technology sectors helped Canada’s main stock index gain almost 100 points on Friday, while U.S. stock markets also climbed higher.
The S&P/TSX composite index closed up 93.51 points at 23,568.65.
In New York, the Dow Jones industrial average was up 297.01 points at 41,393.78. The S&P 500 index was up 30.26 points at 5,626.02, while the Nasdaq composite was up 114.30 points at 17,683.98.
The Canadian dollar traded for 73.61 cents US compared with 73.58 cents US on Thursday.
The October crude oil contract was down 32 cents at US$68.65 per barrel and the October natural gas contract was down five cents at US$2.31 per mmBTU.
The December gold contract was up US$30.10 at US$2,610.70 an ounce and the December copper contract was up four cents US$4.24 a pound.
This report by The Canadian Press was first published Sept. 13, 2024.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
The Canadian Press. All rights reserved.
OTTAWA – Statistics Canada says wholesale sales, excluding petroleum, petroleum products, and other hydrocarbons and excluding oilseed and grain, rose 0.4 per cent to $82.7 billion in July.
The increase came as sales in the miscellaneous subsector gained three per cent to reach $10.5 billion in July, helped by strength in the agriculture supplies industry group, which rose 9.2 per cent.
The food, beverage and tobacco subsector added 1.7 per cent to total $15 billion in July.
The personal and household goods subsector fell 2.5 per cent to $12.1 billion.
In volume terms, overall wholesale sales rose 0.5 per cent in July.
Statistics Canada started including oilseed and grain as well as the petroleum and petroleum products subsector as part of wholesale trade last year, but is excluding the data from monthly analysis until there is enough historical data.
This report by The Canadian Press was first published Sept. 13, 2024.
The Canadian Press. All rights reserved.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in the base metal and energy sectors, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 172.18 points at 23,383.35.
In New York, the Dow Jones industrial average was down 34.99 points at 40,826.72. The S&P 500 index was up 10.56 points at 5,564.69, while the Nasdaq composite was up 74.84 points at 17,470.37.
The Canadian dollar traded for 73.55 cents US compared with 73.59 cents US on Wednesday.
The October crude oil contract was up $2.00 at US$69.31 per barrel and the October natural gas contract was up five cents at US$2.32 per mmBTU.
The December gold contract was up US$40.00 at US$2,582.40 an ounce and the December copper contract was up six cents at US$4.20 a pound.
This report by The Canadian Press was first published Sept. 12, 2024.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
The Canadian Press. All rights reserved.
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