The Financial Post reports in its Thursday, July 15, edition that the Bank of Canada plans to let inflation run faster than its 2-per-cent target through 2023.
The Post's Kevin Carmichael writes that the BOC on July 14 published new forecasts predicting the country is on the verge of an impressive burst of economic growth that will offset a disappointing start to the year.
The projections were not strong enough to alter Governor Tiff Macklem's plan to keep the benchmark interest rate pinned near zero until at least the second half of next year, but evidence of gathering momentum prompted policymakers to pare their weekly purchases of Government of Canada bonds to $2-billion, from $3-billion.
The decision to taper the bond-buying program was widely expected by observers, as was an upward revision to growth projections for the second half of the year and 2022.
The short-term trajectory of the economy is correlated with vaccination rates and infections.
Mr. Macklem's forecasters see growth surging to an annual rate of 7.3 per cent in the third quarter, compared with 2 per cent between April and June, as consumers begin to spend some of the savings they accumulated during COVID-19 lockdowns.
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