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October 26, 2022

Monetary Policy Report – October 2022

Monetary Policy Report – October
While inflation has come off its peak, it remains too high. As the economy responds to higher interest rates and as the effects of elevated commodity prices and supply disruptions fade, the Bank expects inflation to fall to about 3% in late 2023, then return to 2% in 2024.

The 2021–22 Surge in Inflation

Staff discussion paper 2023-3 Oleksiy Kryvtsov, James (Jim) C. MacGee, Luis Uzeda
The rise in inflation in 2021–22 sparked a growing literature and debate over the causes of the surge as well as the near- and medium-term path for inflation. This review offers three key messages.
July 30, 2025

Monetary Policy Report—July 2025—Overview

US tariffs are significantly higher than they were at the start of 2025, and US trade policy remains unpredictable. Inflation is near 2%, although underlying price pressures have picked up. With uncertainty about US trade policy still high, the outlook for the Canadian economy remains clouded.
October 7, 2024

Monetary policy

Learn about the objective of Canada’s monetary policy and the main instruments used to implement it: the inflation-control target and the flexible exchange rate. See also how monetary policy works, how decisions are made and read related backgrounders.

Housing and the Long-Term Real Effects of Changes in Trend Inflation

Staff working paper 2026-1 James (Jim) C. MacGee, Yuxi Yao
An economy with fixed amortization mortgages and borrowing-constrained consumers leads to the level of inflation targeted having real effects on home ownership, consumption, and debt. Using a life-cycle housing tenure choice model, we show that by front-loading real mortgage payments, higher inflation lowers steady-state home ownership and the mortgage-debt-to-income ratio.
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