Bank of Canada caution on rates a mistake as debt swells, Dodge warns

 

Financial Post-Bloomberg.com

One of Governor Stephen Poloz’s predecessors says the Bank of Canada’s current approach to increasing interest rates is too cautious.

David Dodge, who led the Canadian central bank between 2001 and 2008, thinks Poloz should focus more on the long-neglected issue of financial stability and take the opportunity to raise rates now that the economy is running more or less at potential. Poloz kept his benchmark rate at 1 per cent last week and indicated he’s in no rush to tighten, given that he still sees signs of wage and inflation slack.

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