But this has not been our experience in Canada. For example, in the immediate aftermath of the 9/11 terrorist attacks, we lowered interest rates quickly and decisively to underpin confidence. When a major loss of confidence did not materialize, we were able to reverse course in fairly short order and withdraw some of that monetary stimulus.
Our inflation-targeting framework did not restrict our ability to act. Indeed, because our framework is transparent, financial markets were able to appreciate why we made these rapid rate adjustments. The Bank of Canada focuses on inflation at the national level. This can lead to suggestions that some of Canada's regions may not have the appropriate policy for their particular circumstances.