And so have higher interest rates. Getting back to the Bank’s target rate of inflation will bring many benefits and help us sidestep many risks. It will allow the economy to work more efficiently and avoid the distortions that come with high and volatile inflation. This is good for households, workers, businesses and the economy as a whole.
That’s why the Bank is committed to getting there. Being resolute in pursuit of this goal matters. In fact, the Bank’s resolve—and people’s awareness of it—will help Canada’s economy reach the target faster and with less pain than if the Bank is half-hearted and lets up too soon. When it comes to inflation, stability begets stability and volatility produces volatility.