-
Beaudry: Our commitment to 2% inflation
Canadians know inflation is too high right now. But many may wonder why the Bank’s goal is to get inflation back to 2%. Inflation is mostly influenced by the costs that go into what firms produce and sell. When inflation is high, firms tend to raise their prices more frequently. Consumers, in turn, expect higher prices and stop shopping around for the best deal. But when a central bank has a credible record of achieving low and stable inflation, firms tend to absorb day-to-day changes in their costs rather than pass them on to consumers. This is because they believe inflation will stay close to the central bank’s ... (full story)
-
BoC’s Beaudry: Canadians Shouldn’t Be Concerned ‘if We Follow a Slightly Different Path to Inflation Normalization Than Our Counterparts’
— *seven (@sevenloI) February 16, 2023
- Floating CAD Gives the Bank the Flexibility to Chart a Different Path Than Trading Partners and Focus on Setting Interest Rates
-
BoC’s Beaudry: It Will Take Time to Get Back to the Bank’s Inflation Target of 2%
— *seven (@sevenloI) February 16, 2023
- If People Start to Base Inflation Expectations on Current High Numbers Rather Than the 2% Target, High Inflation Becomes Persistent, Volatile and Self-Perpetuating
-
BoC’s Beaudry: Without a Sufficiently Strong Policy Response, a Drift in Expectations Away From the Bank’s Inflation Target Can Open the Door to Inflation Remaining High and Volatile for Longer
— *seven (@sevenloI) February 16, 2023