That said, there are three considerations that are more specific to the euro area. Adjusting policy when inflation is converging to target The first relates to the inflation outlook. A central bank that faces a significant risk of inflation being markedly above target over the medium term would need to initiate a rapid sequence of policy rate hikes to above their estimated neutral levels.
Although we continue to expect abovetrend growth in Canada this year and next, the recent data suggest that the first quarter will be on the soft side. This mostly seems to be attributable to unusual weather, but it bears deeper analysis.