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Low interest rates: “There is hope,” says senator and economist Clement Gignac.

Low interest rates: “There is hope,” says senator and economist Clement Gignac.

Canada could cut interest rates more quickly than its southern neighbour, says Senator and economist Clement Gignac, who met with the governor of the Bank of Canada in the Senate on Wednesday.

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“There is hope,” the senator said in an interview with LCN Now, stressing that it would be possible to start cutting interest rates as early as June.

“[Tiff Macklem] “It is prepared for a ‘made in Canada’ monetary policy, meaning it could diverge from the Fed, if inflation numbers continue to work together,” he adds.

Mr. Gignac emphasizes that the economic situations of the United States and Canada are very different and that this would explain the possibility of the Bank of Canada using a diverging strategy.

While inflation is “steadier” in Uncle Sam's country, it has stabilized in Canada due to more restrictive monetary policies, creating an economic situation that is less forward.

“The unemployment rate has risen over the past year, from 5% to more than 6%. Our GDP per capita is declining, and we are back to the level of 2016, while in the United States, it is rising.

However, Mr. Gignac explains that the Governor of the Bank of Canada has been keen to monitor the value of the Canadian dollar.

“If this time the Bank of Canada starts cutting interest rates before the Fed, at that point, that could have an impact on the Canadian dollar,” he explains.

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According to Mr. Gignac, Tiff Macklem is “determined to get inflation down to 2%, but not at the expense of causing a recession.”

***Watch the interview with Clément Gignac in the video above***