This means that we worry as much about inflation falling below the target as we do about it rising above the target. Through most of the last decade, we have succeeded in keeping inflation close to the target. And so, Canadians' expectations for inflation have become anchored around 2 per cent.
All this has helped to smooth out the ups and downs in the economy and to create the best possible environment for longer-term economic growth. This framework may sound simple in theory. But it is quite complex in practice. Our monetary policy decisions are based on economic projections, which can always be thrown off by unforeseen events.