Although the Canadian economy has not escaped the effects of financial market dislocations or the weakening U.S. economy, the Canadian financial system and the housing market have shown considerable resilience, in part reflecting prudent practices.
Thus, as the momentum toward achieving the price stability target is maintained, the year-on-year rate of change in the CPI is likely to increase gradually toward 2 percent. II. Conduct of Monetary Policy Next, I will explain the Bank’s conduct of monetary policy.