Bank of Canada governor Stephen Poloz is not missing any opportunity to let Canadians know that interest rates are heading higher.
The latest hint comes from a German newspaper interview Tuesday, in which the governor was quite descriptive.
“If we only watched inflation and reacted to inflation we would never reach our inflation target. We’d always be two years behind in the reaction. So we have to look at the rest of our indicators in the models that predict inflation,” he told Handelsblatt.
“When you are driving towards a red stoplight, you ease up on the accelerator well before you get there instead of waiting for the last second to stop. I think the same thinking is true in monetary policy, because you must anticipate where the economy will be 18 or 24 months from now.”
The Bank of Canada watches other indicators, and those indicators are all screaming for a rate hike on July 12.
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