But as long as myopia appeared to be restricted to a relatively small portion of the population, and asset prices and expectations in the aggregate seemed realistic given what we know today, we would have little reason to anticipate serious problems as interest rates adjust.
And the movements themselves have their own effect on demand, by changing relative prices for Canadian goods and services and by shifting demand between domestic and foreign products. The challenge for the Bank is to evaluate these movements, together with other data, and set a course for monetary policy that works to keep demand and supply in balance and inflation on target.