In short, what is necessary is to check economic activity, prices, and the financial environment in a balanced manner from the perspective of realizing sustainable growth. Reality of inflation expectations The second issue regarding the overcoming of deflation concerns inflation expectations.
With unemployment at a 33-year low, it's clear that Canada has been going through this difficult process of adjustment with considerable success. Our job at the Bank of Canada is to continue to aim for 2 per cent inflation so that when some prices change, these are clearly relative price changes, and longerrun inflation expectations remain anchored at the 2 per cent target.