Canada (Commonwealth Union)_ Justin Trudeau, Canadian Prime Minister expect the interest rates to fall by mid next year, in line with recent Reuters poll estimates, though the recent economic data has turned the central bank more hawkish.
“We all know that things are going to get better in the future. Inflation will come down and interest rates will fall by mid next year,” just before returning back to Canada, Trudeau mentioned it to the New York Times, after attending the United Nations General Assembly.
Trudeau’s popularity as measured by the opinion polls has reduced since Canadians are dealing with a cost-of-living crisis, which is sparked by the central bank’s record pace of interest rate increases to tame inflation.
While the inflation has eased from its peak, the August CPI rose to 4% coming in above the central bank’s 2% target, and the Bank of Canada Governor Tiff Macklem said that these rates may not be that high enough.
Most of the economists, 24 of 34, polled between Aug 24-30 expect the BoC to keep its policy rate at the current level of 5% or higher until at least the end of March 2024. The median shows 50 basis points worth of cuts by the end of June next year, in line with expectations for the U.S. Federal Reserve.
Trudeau has waded into a sensitive monetary policy debate and by his government and other provincial politicians, he has past comments on interest rates and have raised questions about the independence of the Central Bank.
In the beginning of this month, Finance Minister Chrystia Freeland defended the BoC’s independence after her comments that the central bank’s decision to hold the interest rate steady “is welcome relief for Canadians” raised concerns to the contrary.
Pierre Poilievre,the Conservative Party Leader,has mainly blamed the Trudeau government’s extreme spending which happened during the pandemic for the inflation and the affordability crisis.
Trudeau recently told the papers that most of the people are worried and mad at the government since things are not going that well and it’s a very hard time for them to survive at the moment.
