The other main risks to Canada’s economic outlook include the possibility that the momentum of aggregate demand from the US economy will continue to be stronger than expected and the likelihood of a buildup of inflationary pressures in the United States spilling over into Canada. The US economy has continued to steam ahead.
There is a clear need for the pace of expansion in the United States to slow as we progress through this year and into 2001. Prudent monetary management dictates that we in Canada do not underestimate the upside risks for inflation, especially given the strong growth of aggregate demand in Canada, the United States, and elsewhere.