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Tariffs and related uncertainty continue to weigh on firms, according to results from the Business Outlook Survey and the Business Leaders’ Pulse. While overall sales outlooks remain weak, outlooks for exports have recovered somewhat, with worst-case trade scenarios appearing less likely. Firms remain cautious in their hiring and investment plans. Some businesses reported cost pressures from tariffs, but competition and weak demand are constraining price pass-through to customers. In this context, firms’ short-term inflation expectations are lower than they were last quarter.

The Bank of Canada today announced the five finalist teams in the 2018–19 edition of The Governor’s Challenge, a competition where university students simulate the role of advisor to the Bank’s Governing Council.

The Bank of Canada has announced the five finalist teams in the 2020-21 edition of The Governor’s Challenge, a competition where university students simulate the role of advisor to the Bank’s Governing Council.

The neutral rate serves as a benchmark for measuring monetary stimulus and provides a medium- to long-run anchor for the real policy rate. Global neutral rate estimates have been falling over the past few decades. Factors such as population aging, high corporate savings, and low trend productivity growth are likely to continue supporting a low global neutral rate. These global factors as well as domestic factors are exerting downward pres-sure on the Canadian real neutral rate, which is estimated to be between 0.5 to 1.5 per cent. This low neutral rate has important implications for monetary policy and financial stability.

The immediate impact and the fallout from last September's events introduced new layers of uncertainty into the economic picture, compounding the effects of a deepening global economic slowdown that had become more evident during the summer.

Since we have recently tabled the Bank of Canada’s Annual Report in Parliament, I would also be happy to answer any questions you may have about our stewardship of the Bank.

In highlighting the Bank's commitment to contribute to the economic well-being of Canadians, Mr. Dodge said that the Bank must continue to "conduct monetary policy so as to promote sustained economic growth, create conditions conducive to rising investment, employment, and incomes, and encourage a more stable macroeconomic environment." He stressed that the best contribution monetary policy can make to such an outcome is "to keep future inflation low, stable, and predictable."

This monthly newsletter features the latest research publications by Bank of Canada economists including external publications and working papers published on the Bank of Canada’s website.