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Globe says Big 6 banks don't believe "transitory" line

2021-11-18 08:22 ET - In the News

See In the News (C-TD) Toronto-Dominion Bank

The Globe and Mail reports in its Thursday edition that Wednesday's inflation report from Statistics Canada showed October's consumer price index up 4.7 per cent from a year earlier. The Globe's guest columnist William Robson writes that we are still hearing about "transitory" inflation from many forecasters and central bankers. The inflation from the mid-1960s to the early 1990s was transitory. It came and went. Two-per-cent inflation was common until 1965 and became an official Bank of Canada target after 1995. However, Mr. Robson notes that between those two dates, the consumer price index more than quintupled. The purchasing power of anything measured in dollars in 1965 had fallen to less than 20 cents on the dollar 30 years later. The current episode may not be as bad or last as long. However like past bouts of inflation, Mr. Robson notes it is eroding the value of our money. The purchasing power lost between 1965 and 1995 never came back. Neither will the purchasing power that inflation above 2 per cent is costing us now. Mr. Robson says we need a fresh commitment from the federal government and the BOC to limit the damage by reaffirming our 2-per-cent inflation target, and making sure we hit it.

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