Firms’ inflation expectations and price-setting behaviour in Canada: Evidence from a business survey Staff analytical note 2023-3 Ramisha Asghar, James Fudurich, Jane Voll Canadian firms’ expectations for high inflation may be influencing their price setting, supporting strong price growth and delays in the transmission of monetary policy. Using data from the Business Outlook Survey, we investigate the reasons behind widespread price growth seen in Canada in 2021 and early 2022. Content Type(s): Staff research, Staff analytical notes JEL Code(s): D, D2, D22, E, E3, E31 Research Theme(s): Monetary policy, Inflation dynamics and pressures, Real economy and forecasting
October 6, 2006 Business Outlook Survey - Autumn 2006 Overall, businesses continue to be positive about the economic outlook. Content Type(s): Publications, Business Outlook Survey
February 23, 2012 Bank of Canada Review - Winter 2011-2012 This special issue, “Household Finances and Financial Stability,” examines recent Bank of Canada research into two interrelated facts: the steady increase in Canadian household indebtedness in recent decades, and the upward trend in real house prices in Canada since 2000. Rising house prices could lead to the accumulation of debt, and abrupt movements in either factor can influence the financial health of households, which are a central part of Canada’s economy. Content Type(s): Publications, Bank of Canada Review
May 22, 2003 Inflation Targeting and Medium-Term Planning: Some Simple Rules of Thumb Bank of Canada Review - Spring 2003 David Longworth Inflation targeting, a stable macroeconomic environment, and an average growth rate for potential output that is not expected to vary much in the next several years all help households, businesses, and governments in their medium-term economic and financial planning. Several simple rules of thumb can be usefully employed in this planning. Specifically, inflation targeting has maintained most major measures of inflation quite close to the target midpoint on average over a number of years. Combined with a clear fiscal framework, this has contributed to a more stable macroeconomic environment in which output varies less around its potential level. Potential output growth is expected to average around 3 per cent over the next several years. In light of these factors and historical relationships, labour income, profits, and consumer spending will likely grow, on average, by about 5 per cent over the medium term. Real and nominal long-term interest rates should also continue to be stable, with real 30-year yields varying around 3.5 or 4.0 per cent, and nominal yields varying around 5.5 or 6.0 per cent. Content Type(s): Publications, Bank of Canada Review articles
Markets Look Beyond the Headline Staff analytical note 2018-37 Bruno Feunou, James Kyeong, Raisa Leiderman Many reports and analyses interpret the release of new economic data based on the headline surprise—for instance, total inflation, real GDP growth and the unemployment rate. However, we find that headline news alone cannot adequately explain the responses of market prices to new information. Rather, market prices react more strongly, on average, to non-headline news such as the composition of GDP growth, quality of jobs created and revisions to past data. Thus, tracking the impact of non-headline information released on the news day is crucial in analyzing how markets interpret and react to new economic data. Content Type(s): Staff research, Staff analytical notes JEL Code(s): E, E4, E43, G, G1, G12, G14 Research Theme(s): Financial markets and funds management, Market functioning, Monetary policy, Monetary policy framework and transmission
September 4, 2024 Bank of Canada reduces policy rate by 25 basis points to 4¼% Media Relations Ottawa, Ontario The Bank of Canada today reduced its target for the overnight rate to 4¼%, with the Bank Rate at 4½% and the deposit rate at 4¼%. Content Type(s): Press, Press releases
October 23, 2024 Monetary Policy Report—October 2024—In focus: Prices change all the time, and some change more often than others. How often prices change can affect how quickly shifts in economic conditions affect inflation.
January 26, 2022 Monetary Policy Report – January 2022 The Canadian economy entered 2022 in a strong position. The Bank is forecasting growth of 4% in 2022 and about 3½ % in 2023. Content Type(s): Publications, Monetary Policy Report
April 16, 2007 Business Outlook Survey - Spring 2007 All indicators of business activity (future sales, expected employment, and investment intentions) have increased relative to the previous survey. Content Type(s): Publications, Business Outlook Survey
February 9, 2026 Market Participants Survey—Fourth Quarter of 2025 The Market Participants Survey results are based on questionnaire responses from about 27 financial market participants. Content Type(s): Publications, Market Participants Survey