On the inflation side, prices of crude oil and other commodities have increased somewhat in recent weeks, and the foreign exchange value of the dollar has weakened. However, overall, the limited data that we have received since the September FOMC meeting are consistent with continued moderate increases in consumer prices.
Consensus expectations farther out remain at 2 per cent. This pattern in near- and medium-term inflation expectations is very similar to what we saw during the sharp commodity-price spike last spring. At that time, short-term expectations moved up sharply while medium term expectations remained anchored at 2 per cent.