Bank of Canada Warns of Rising Global Instability and Prepares for Economic Shocks

Governor Tiff Macklem outlines plans to reassess inflation targets and adapt monetary policy to address a more volatile economic landscape.

Bank of Canada Governor Tiff Macklem emphasized the increasing unpredictability of the global economy due to factors like deglobalization, demographic changes, and trade protectionism.
The central bank will review its inflation target of 2% during its upcoming mandate renewal process, exploring whether it remains appropriate in a more volatile world.
Macklem highlighted lessons learned from the COVID-19 pandemic and high inflation, stressing the need for better tools to respond to sudden economic shocks.
The Bank of Canada has cut its key interest rate five times this year, with the current rate at 3.25%, and plans a more gradual approach to future monetary policy adjustments.
Macklem underscored the importance of international collaboration to address shared economic challenges, including rising sovereign debt and geopolitical tensions.