And monetary policy decisions are not prescribed by a simple rule. For all these reasons, monetary policy is not a mechanical exercise.
It is better described as risk management.18 There are many sources of uncertainty behind our assessment of the disinflationary forces at work in Canada, ranging from the role of global factors to the amount and impact of excess supply in our economy, the importance and duration of competition effects, and, importantly, the behaviour of inflation expectations. These considerations are all embedded in our decisions.