Bank of Canada faces credibility challenge after rate hikes

Bank of Canada Governor Tiff Macklem acknowledged the need to rebuild public trust after a tumultuous period of interest rate hikes and messaging missteps.

In an interview with CBC News, Macklem admitted concerns about the bank’s credibility following aggressive rate increases to curb inflation. “We’ve taken a bit of a hit, and we’re going to have to rebuild that trust,” he stated. The central bank cuts rates this week for the first time since March 2022, aiming to alleviate economic pressures.

Jim Thorne, chief market strategist from Altus Wellington Private Wealth, criticized the bank’s timing, suggesting earlier cuts could have helped younger Canadians, particularly those with variable-rate mortgages. Opposition leader Pierre Poilievre has also criticized the bank’s policies, raising concerns about its independence from political influence.