Canada

One of the biggest questions is whether she’s willing, as finance minister, to take on the Bank of Canada.

Monetary policy isn’t the only macroeconomic tool, and it’s one that should be coordinated with fiscal and other measures.

In this case, the inflation fighting interest hikes can be argued to be having a ‘perverse effect’ of keeping the housing stock tight without cooling demand while at the same time being completely ineffectual for the other major inflationary drivers of food and fuel.

Food inflation needs antitrust action, while fuel is a long term necessary adjustment to move the market away from fossil fuels. Interest rate hikes have nothing positive to contribute to those concerns.

The Bank of Canada isn’t constitutionally independent no matter how much certain previous governors have tried to make that case. It only has responsibility for one macroeconomic tool, and isn’t democratically elected, rather appointed by the executive.

The current governor of the Bank sounds increasingly like John Crown did in the early to mid 1990s when he put Canada into a deeper and deeper recession/depression because he placed inflation-fighting above all, and used the bank. He claimed however that no government should tell him how to manage monetary policy, and made speeches about the need for a constitutionally independent governor. Then, it took the electoral near eradication of the Progressive Conservative Party at the federal level plus the eventual exasperation of Paul Martin and Jean Chrétien to push Crow out.