Just as importantly, when the economy is operating below its production capacity, and inflation is poised to fall below target, the Bank will lower interest rates to stimulate growth. Whatever the direction of the demand shock, the Bank of Canada will respond appropriately. This symmetry is our answer to the charge that central banks target inflation at the expense of growth.
On the contrary, paying close attention to signs of deviation from our target promotes timely action in response to both positive and negative demand shocks. This is how we can keep the economy operating near its full capacity and thus keep inflation low, stable, and predictable.