Part of this overshoot reflected aboveaverage inflation for petrol and foodstuffs, some of which fortunately is already moderating or likely to moderate in light of lower international agricultural prices or improved domestic crops since the beginning of the year.
Although both U.S. and Canadian 10-year benchmark bonds show a trend decline in volatility since the early 1980s, in the past six years or so, the volatility of Canadian 10-year bonds has been lower than that of their U.S. equivalent. The explicit inflation target in Canada may well be anchoring inflation expectations here more strongly than in the United States.