Press Conference: Monetary Policy Report – January 2023

Inflation around the world remains high and broad-based, but in many countries it has receded from its peak, largely due to declines in energy prices. With continued easing in global supply chain disruptions, inflation in durable goods prices is also moderating. Economic activity in advanced economies has been stronger than expected, labour markets remain tight, and core inflation has yet to show sustained improvement. With inflation still too high, many central banks have continued to increase their policy rates to slow demand and bring inflation down. Russia’s invasion of Ukraine continues to disrupt commodity markets and affect global economic activity. China’s abrupt lifting of COVID-19 restrictions poses an upside risk to commodity prices. In Canada, higher interest rates are working their way through an overheated economy. It remains in excess demand, and this is putting upward pressure on some domestic prices. The labour market is still tight, and many businesses are finding it difficult to attract workers. Monetary policy is slowing demand, helping the economy rebala tweet at 10:01am: BOC: THE ECONOMIES OF THE UNITED STATES AND EUROPE ARE SLOWING, BUT THEY ARE PROVING MORE RESILIENT THAN PREDICTED IN THE OCTOBER MPR. tweet at 10:01am: BOC: CANADA'S GROWTH IS EXPECTED TO SLOW UNTIL THE MIDDLE OF 2023. tweet at 10:02am: BOC REITERATES THAT THE LIKELIHOOD OF A COUPLE OF QUARTERS OF SLIGHTLY NEGATIVE GROWTH IS ROUGHLY EQUAL TO THE LIKELIHOOD OF A COUPLE OF QUARTERS OF SLIGHTLY POSITIVE GROWTH. tweet at 10:06am: BOC: THERE IS MOUNTING EVIDENCE THAT TIGHT FISCAL POLICY IS SLOWING ACTIVITY, PARTICULARLY HOUSEHOLD SPENDING.

The Bank of Canada today increased its target for the overnight rate to 4½%, with the Bank Rate at 4¾% and the deposit rate at 4½%. The Bank is also continuing its policy of ...