(Reuters) - OTTAWA, July 12 - Bank of Canada Governor David
Dodge expressed caution on Thursday about the idea of
aggressively raising interest rates to fight inflation, saying
this would backfire by driving inflation too low.
"We could really ram up interest rates and that would
shorten the period over which inflation would come back to
target but it would also mean ... you would in fact have a
period where we'd be running considerable excess supply and
we'd be pushing inflation well below target," he said.
Read more at Reuters.com Bonds News
Dodge expressed caution on Thursday about the idea of
aggressively raising interest rates to fight inflation, saying
this would backfire by driving inflation too low.
"We could really ram up interest rates and that would
shorten the period over which inflation would come back to
target but it would also mean ... you would in fact have a
period where we'd be running considerable excess supply and
we'd be pushing inflation well below target," he said.
Read more at Reuters.com Bonds News
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