'Very high price' to pay if Macklem missteps on rates: Charest
BNN Bloomberg
“Everything we’re doing right now – since the beginning of this pandemic – with fiscal policy, monetary policy is experimental. We’ve never done this before, we’ve never come out of a pandemic before”
Former Quebec Premier Jean Charest is urging Bank of Canada Governor Tiff Macklem to act prudently and decisively when it comes to tightening financial conditions.
In an interview Thursday, Charest, now a partner at law firm McCarthy Tétrault LLP, said that the unprecedented nature of executing a smooth fiscal and monetary transition back to more normalized conditions requires a deft touch.
“Everything we’re doing right now – since the beginning of this pandemic – with fiscal policy, monetary policy is experimental. We’ve never done this before, we’ve never come out of a pandemic before,” he said.
“So the landing, the soft landing we’re looking for, is going to be tentative.”
There’s been a growing chorus of voices in the economics community calling for the Bank of Canada to begin raising rates starting at their policy meeting next week amid inflation running at its highest level since 1991 and speculation the disruptions stemming from the spread of the Omicron variant of COVID-19 could be short-lived.
At the same time, employment has exceeded pre-pandemic levels, suggesting some traction in the overall economic recovery even as the world navigates pandemic hurdles.
