Bank of Canada Needs to 'Stay the Course,' Macklem Says

The video discusses the current state of monetary policy, highlighting the need for continued quantitative tightening due to persistent underlying inflationary pressures. Despite progress in reducing CPI inflation from 8.1% to 3.4%, higher interest rates are necessary to manage demand and price pressures. The video emphasizes the importance of balancing the risks of under and over-tightening to avoid future economic challenges and maintain price stability in Canada.

What is the main reason for continuing the policy of quantitative tightening?

• To increase inflation rates

• To reduce government spending

• To address persistent underlying inflationary pressures

• To decrease economic growth

How much has CPI inflation decreased from its peak last summer?

• From 10% to 5%

• From 8.1% to 3.4%

• From 9% to 4%

• From 7% to 2%

Why are higher interest rates necessary according to the transcript?

• To encourage more borrowing

• To boost the housing market

• To slow the growth of demand and relieve price pressures

• To increase consumer spending

What is the risk of over-tightening monetary policy?

• It might cause a housing market crash

• It could lead to increased inflation

• It might make economic conditions unnecessarily painful

• It could result in higher unemployment

What is the ultimate goal of the monetary policy discussed in the transcript?

• To boost international trade

• To reduce the national debt

• To restore price stability for Canadians

• To increase government revenue