For my purposes today, however, the most significant concern regarding the use of the standard Taylor rule as a policy benchmark is its implication that monetary policy should depend on currently observed values of inflation and output.
How much further will depend on how monetary policy is working to slow demand, how supply challenges are resolving and how inflation and inflation expectations are responding to this tightening cycle. Our decision reflected several considerations. First, inflation in Canada remains high and broad-based, reflecting large increases in both goods and services prices.