We are undertaking our review to ensure we are well positioned to meet our goals for many years to come. We also want to make sure that the way we are setting monetary policy is keeping up with the way the economy is changing, which I have been referring to as the “new normal.
Central bank policy frameworks may differ, but the concept of inflation control is at the heart of monetary policy in most economies. Are low yields an indication that investors think we will be unable to bring inflation back up to its target? To help answer this question, let’s look at the Canadian data.