Bank of Canada governor Tiff Macklem says the economy is still overheated and the labour market is too tight.
The governor’s comments come after Statistics Canada’s most recent labour force survey revealed the economy added 150,000 jobs last month as the unemployment rate hovers around record lows.
While testifying before the House of Commons finance committee on Thursday, Macklem told MPs the economy is in excess demand, which is putting upward pressure on prices.
That’s despite the Bank of Canada aiming to slow the economy and cool inflation by hiking its key interest rate to 4.5 per cent, the highest its been since 2007.
After announcing the central bank will temporarily pause interest rate hikes last month, Macklem once again stressed on Thursday that he is ready to raise rates further if inflation proves to be sticky.
Statistics Canada is scheduled to release January inflation data on Tuesday.