Growth of the Canadian economy has been essentially in line with the Bank's expectations as set out in the January Monetary Policy Report Update. But inflation has been higher than expected. After considering the full range of indicators, the Bank now judges that the Canadian economy was operating just above its production capacity in the first quarter of this year.
The main goal of monetary policy is to help the country achieve strong, sustainable economic performance, and, in doing so, to contribute to rising living standards for Canadians. Experience has shown that the best way for a central bank to meet this goal, given the instruments at its disposal, is by keeping inflation low and stable. Low and stable inflation increases confidence in the future value of money, and allows for clear price signals.