Bank of Canada; Eating Crow?

Is the Bank of Canada now in the process of beginning to eat crow?

The Bank of Canada admitted on May 13, 2021 that “some of the monetary policy tools it is using to address the COVID-19 pandemic, such as quantitative easing (QE), could widen wealth inequality,” see here

The Bank said they are looking closely at the issue.  Although we’re not holding our breath for any type of epiphany or major change in economic thinking it’s at least a step in the right direction.  Like the first step on the journey to sobriety; admitting you have a drinking problem is the first step.

The Bank admitting that its QE program was “boosting wealth by inflating the value of assets” is a start.  Governor Tiff Macklem said “…these assets aren’t distributed evenly across society. As a result, QE can widen wealth inequality. We will look closely at the outcomes of QE here and elsewhere and will work to more fully understand its impact on both income and wealth inequality.” 

The Bank of Canada had been buying CA$4 billion in government bonds per week and recently cut that to CA$3 billion. It is the first major central bank to taper, signaling that it could also raise interest rates next year.

However, in the same breath Macklem reiterated that the bank’s benchmark rate would stay at 0.25% until inflation sustainably hit 2%.  Sustainably hit 2%?  What? Really?

The above leads us to conclude that not only does Macklem not believe that the free markets have any say over where interest rates are going but that he hasn’t stepped foot into a grocery store for almost a decade!