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Businesses remain optimistic about the economic outlook. Indeed, the results of this survey are broadly similar to those of the spring 2005 survey.

This is an account of the deliberations of the Bank of Canada’s Governing Council leading to the  monetary policy decision on April 16, 2025.

This article outlines one of the Bank's key approaches to dealing with the uncertainty that surrounds decisions on monetary policy: the consideration of a wide range of information from a variety of sources. More specifically, it describes the information and analysis that the monetary policy decision-makers—the Governing Council of the Bank of Canada—receive in the two or three weeks leading up to a decision on the setting of the policy rate—the target overnight interest rate. The article also describes how the Governing Council reaches this decision.

Canadian economic growth has slowed, reflecting the disruptive effects of US tariffs and a decline in population growth. Exports and business investment have slumped. After being close to 2% for several months, CPI inflation was 2.4% in September.

But first, I would like to address an important subject; that is, how to promote the efficient operation of Canada's financial markets. Rather than approaching this topic in a detailed, technical way, I want to speak about two qualities that are essential to their efficient operation: trust and transparency.

The existence of a market for Real Return Bonds in Canada provides a direct tool with which to measure market expectations of inflation by comparing the yields on these bonds with those on conventional Government of Canada long-term bonds. However, there are other factors besides inflation expectations that may affect the yield differential. After reviewing these factors, the authors note that they can lead to a potentially large bias in the level of inflation expectations. The changes in the differential over time may, nonetheless, be a good indicator of movements in long-run inflation expectations. Based on this measure, expectations of long-run inflation have declined since late 1994.

To state the obvious, Canada is a very open economy, heavily dependent on foreign trade. What goes on in the rest of the world can have a substantial impact on our domestic economy.

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Depression Scrip

The examples of Depression scrip illustrated here are part of the National Currency Collection of the Bank of Canada.

These past few months have been busy for central bankers, to say the least, and the past few days are certainly no exception. While developments on Wall Street have garnered much attention, the cost of living has also been an issue for us all, whether we're buying gas at the pumps, booking an airline ticket, or just picking up a loaf of bread at the grocery store.

We compare the determinants of consumer inflation expectations in the US and Canada by analyzing two current surveys. We find that Canadian consumers rely more on professional forecasts and the history of actual inflation when forming their expectations, while US consumers rely more on their own lagged expectations.