The first Policy Targets Agreement defined our target as inflation of between 0 and 2 per cent annually, as measured by the CPI, achieved before the end of 1992.1  •  The fourth principle on which the 1989 Act was built was based on the observed fact that, internationally, central banks which are independent of political control seem to do a very much better job of keeping inflation low than do central banks which are subject to political direction.
I’ll spend some time explaining why we have chosen to front-load rate increases— I would like to thank Erik Ens and Kristina Hess for their help in preparing this speech. -2-  why we think this has been the right response to the current underlying causes of inflation in Canada.