At the Bank of Canada, we try to be realistic about the things we don’t know and do a thorough examination of the related risks. Every time we come to a decision, there are a number of potential paths for policy that could be consistent with the inflation goal.
In the process of formulating policy, we weigh these possibilities and focus on those that fall into a zone where the range of likely outcomes makes us reasonably certain that we’ll achieve the inflation target over an acceptable time frame and that financial stability risks will evolve in a constructive way.