Bank of Canada governor Macklem speaks after rate decision

TORONTO (Reuters) – Below are some key quotes from a news conference by Bank of Canada Governor Tiff Macklem on Wednesday after the central bank held interest rate steady.

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FILE PHOTO: Bank of Canada Governor Tiff Macklem takes part in an event at the Bank of Canada in Ottawa

MACKLEM ON UNEMPLOYMENT RATES

“You can’t summarize the entire labour market with one statistic. The unemployment rate is important one but in assessing the labour market you do need to look at a broader range of indicators and we’ve published a dashboard to show everybody what we’re looking at.”

MACKLEM ON BONDS AND INFLATION

“I really want to disabuse you of the idea that there is any sort of direct effect between bond buying and inflation. Bond buying is part of a package of monetary policy tools we use to lower interest rates. That’s important to supporting the recovery and it’s working very effectively.”

MACKLEM ON RAISING INTEREST RATES SOONER

“We took an important step today, we ended quantitative easing. We’ve also… indicated in our new forecast, that we now expect slack to be absorbed sooner. And that signals that we will be considering raising interest rates sooner than we previously thought. So interest rates don’t need to be as low for as long to get that full recovery and to get inflation back.”

MACKLEM ON INFLATION PRESSURES MOVING FORWARD

“As we move forward, we do expect that those (production bottlenecks) will ease. Vaccinations are working. People around the world are getting vaccinated. That should reduce the spread of the virus. That should reduce these production problems. That should reduce the labor shortages or shutdowns at ports. Companies are investing in logistics. That should also help cut through these bottlenecks.”

MACKLEM ON SIGNS OF PROLONGED INFLATIONARY PRESSURES

“We are watching closely inflation expectations and wage costs for any signs that these increases in prices of globally traded goods start to spread and lead to more generalized and more ongoing inflation.

“So far we are not seeing that. But if we do see that we will certainly take action and adjust our monetary policy stance further to deal with it and bring inflation back to target … Bottom line is, Canadians can have confidence that inflation will come back to target.”

(Reporting by Fergal Smith, Nichola Saminather)