Quote:
Originally Posted by Firebot
You realize that if central banks make major interest rates hikes specifically in order to combat inflation by forcing a recession, inflation isn't exactly running a natural or 'transitory' course...right?
What an insanely stupid argument. |
The rate hikes are unlikely to have had any real impact on inflation yet, but inflation already looks to be moderating. Canada's inflation over the last 3 months has been a little over 2% annualized, despite the fact that none of the last 3 rate hikes would have had any tangible influence on that.
In the counterfactual where the Bank of Canada didn't raise rates as aggressively, there's a good chance that inflation would be tamed regardless. But they don't want to take that risk because a recession is far less damaging than prolonged runaway inflation.