'Everybody should just shut up': Bank of Canada's independence under pressure from political comments

financialpost.com:

The Bank of Canada is supposed to be free from government interference, but elected officials have become more vocal about interest rates, inflation and the effect on their citizens, leaving some experts fretting about the central bank’s independence when it comes to monetary policy.

“Everybody should just shut up,” said Christopher Ragan, founding director of the Max Bell School of Public Policy at McGill University in Montreal, following remarks by Chrystia Freeland and three premiers regarding the Bank of Canada’s interest rate hold last week.

The central bank’s decision to hold rates at five per cent “is welcome relief for Canadians,” the federal finance minister and deputy prime minister said in a statement after the central bank announced its decision on Sept. 6. “As the bank continues this work, my number one priority is to use all the tools at my disposal, and to work with partners at other levels of government across Canada, to ensure that interest rates can come down as soon as possible.”

Freeland said she respected the Bank of Canada’s independence, but others aren’t so sure.

“Frankly, I would have thought that the federal minister of finance would know better than to express that kind of view,” Ragan said. “To say that you are relieved that the Bank of Canada didn’t raise the interest rate might lead somebody to wonder, ‘Did the federal minister of finance put pressure on the Bank of Canada?'”

Freeland wasn’t the only politician to express her views. The premiers of British Columbia, Ontario and Newfoundland and Labrador also weighed in just days before the central bank’s decision.

B.C. Premier David Eby in a letter told Macklem to consider that “people are hurting” due to the rising cost of borrowed money.

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