As time goes by, I am increasing my estimate of what that would be. I am not a forecaster, but what is relevant is the level of the Bank of Canada's overnight rate compared to inflation expectations. That's why I said earlier, if inflation expectations stayed down around 2%, then the Bank of Canada doesn't need to raise its overnight rate all that far in order to contain the problem.
At the moment, though, it seems to me that inflation expectations are likely rising. Even the Bank of Canada's last forecast doesn't have inflation getting back to 2% for a couple of years plus. The higher inflation expectations begin to go, the higher the overnight rate itself needs to go. At this point, I'm getting concerned that we might need to see an overnight rate of 3%, maybe 4%.
That's not as high as it got during the last disinflationary episode, but it's quite a bit higher than what people are ready for. It's certainly higher than what the government is expecting in its fiscal plans, and the cost of servicing its own debt.