02
Mar
Ottawa (Rajeev Sharma): The Bank of Canada has issued a cautious warning that interest rate increases may occasionally be required even during periods of economic stagnation, as the country prepares for significant structural shifts and potential global supply shocks. Speaking in Norway on Monday, March 2, 2026, Deputy Governor Sharon Kozicki addressed the "difficult trade-off" that central banks face when inflationary pressures are driven by supply-side disruptions rather than domestic demand. She noted that while it might seem counterintuitive to tighten monetary policy during a weak economy, such restraint is essential to prevent inflation from becoming persistent. Kozicki identified several…