Bank of Canada Governor Tiff Macklem appears at the Standing Committee on Finance, in Ottawa, on Oct. 29.Adrian Wyld/The Canadian Press
The Bank of Canada is starting to see the impact of its four rate cuts so far this year and expects to gather more evidence in the months ahead, Governor Tiff Macklem said on Tuesday.
The central bank last week cut its key benchmark rate by 50 basis points to 3.75%, its first bigger-than-usual move in more than four years, and hailed signs the country had returned to an era of low inflation.
The central bank, which hiked rates to a 20-year high to fight soaring prices, has now cut four times in a row since June. Inflation in September sank to 1.6%, below the 2% target.
“You are starting to see some impact of (the cuts). Some of it is more anecdotal – I expect we will see more in the data going forward,” Macklem said.
Macklem, speaking to the House of Commons finance committee, reiterated that the bank would be able to cut rates further if the economy evolved broadly in line with forecasts.
“We want to see growth strengthen. Last week’s interest rate decision should contribute to a pickup in demand,” he said.