OTTAWA - One of the Bank of Canada’s top officials says the central bank is taking a deeper dive into how it makes interest rate decisions to to better understand the trade-offs between a cut today and hitting inflation targets in the future. A drop in interest rates to address an immediate economic concern typically sparks a boom household spending — and borrowing — activity, said deputy governor Paul Beaudry. He says the Bank of Canada is digging deeper into the issue to better understand the trade-offs in interest rate decisions. “If we bring financial vulnerabilities into the equation, it means introducing a degree of flexibility into the inflation-targeting process,” he said in the speech. YOU MIGHT BE INTERESTED IN...Beaudry’s prepared remarks focused on October’s rate decision, when lowering the key rate was seen as insurance against a future slowdown.

Source: thestar January 30, 2020 20:49 UTC