Bank of Canada Sees ‘Good Rebound’ Despite Rising Inflation Risk

Bank of Canada Governor Tiff Macklem said the economic recovery is on track despite disappointing output growth, but warned there’s a risk high inflation could prove more persistent than expected, Bloomberg News reported. Gross domestic product suffered a shock contraction in the second quarter, and data since then suggest economic growth in the next three-month period will fall short of the central bank’s forecast for a 7.3% annualized gain. “The track for GDP is probably a little bit slower than what we put out in July, but we do continue to expect a good rebound,” Macklem said at a press conference Thursday, reiterating the bank’s prediction for a strong second half of the year. His comments came after a speech delivered virtually to the Council on Foreign Relations in Washington in which he said the international monetary and financial system will come under mounting pressure as economies withdraw extraordinary stimulus. Read more.