Canadian Prime Minister Justin Trudeau holds a press conference on the sidelines of the United Nations General Assembly in New York, United States, September 21, 2023 as tensions rise after Canada announced it was “actively pursuing credible allegations” linking Indian government agents to the killing of a Sikh. Separatist leader in June. Reuters/Mike Segar/File Obtaining licensing rights
September 23 (Reuters) – Canadian Prime Minister Justin Trudeau expects interest rates to start falling by the middle of next year, in line with estimates from a recent Reuters poll, although the latest economic data has made the central bank more hawkish.
“We know things are going to start getting better. Inflation is coming down. We think interest rates are going to start going down probably in the middle of next year,” Trudeau told the New York Times in an interview before returning to Canada after attending the conference. United Nations General Assembly.
Trudeau’s popularity has fallen, according to opinion polls, as Canadians deal with a cost-of-living crisis, sparked by the central bank’s record pace of interest rate increases to curb inflation.
While inflation eased from its peak, the August CPI rose to 4%, above the central bank’s 2% target, and Bank of Canada Governor Tiff Macklem said interest rates may not be high enough.
A majority of economists, 24 of 34, polled August 24-30, expect the Bank of Canada to keep interest rates at the current level of 5% or higher until at least the end of March 2024. The average value shows 50 basis points of cuts by the end of June next year, in line with the US Federal Reserve’s expectations.
Trudeau has been embroiled in a sensitive debate over monetary policy, and previous comments on interest rates by his government and other regional politicians have raised questions about the independence of the central bank.
Earlier this month, Finance Minister Chrystia Freeland defended the independence of the Bank of Canada after her comments that the central bank’s decision to keep interest rates steady “is a welcome relief for Canadians” raised concerns to the contrary.
The Prime Minister’s Office declined to comment on Saturday on Trudeau’s comments.
Conservative Leader Pierre Poilievre blamed the Trudeau government’s massive spending during the pandemic for inflation and an affordability crisis.
“People are angry with governments because things are not going well and people are worried. So, yes, it is a difficult time,” Trudeau told the newspaper.
David Ljunggren reports in Ottawa. Writing by Denny Thomas, Editing by Franklin Paul
Our standards: Thomson Reuters Trust Principles.