Central Bank Governor Admits Errors Were Made Fighting Inflation

Mistakes were made fighting recent inflation, Bank of Canada Governor Tiff Macklem has detailed in a new essay. Mr. Macklem said he and his team underestimated the inflationary risk from the mix of supply shocks and high consumer demand during the COVID-19 pandemic. He also said that the bank’s models were not accurately adjusted to gauge price pressures across the economy, and officials did not pay enough attention to the potential sharp increase in inflation. “We need to be humble, when humility is due,” Mr. Macklem wrote in the essay in “Monetary Policy Responses to the Post-Pandemic Inflation” published by the Centre for Economic Policy Research....