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Although the global financial system continues to recover gradually from the unprecedented dislocations experienced in recent years, significant downside risks remain. Market concerns over acute fiscal strains in some euro-area countries have intensified sharply in recent weeks.

FSR Highlights - December 2010

Conventional models imply that central banks aiming to raise inflation should lower nominal rates and thus stimulate aggregate demand. However, several economists have recently challenged this conventional wisdom in favour of an alternative “neo-Fisherian’’ view under which higher nominal rates might in fact lead to higher inflation.

At the Bank of Canada, we have worked hard over the past several years to define our goals and our methods for achieving them. We have continued to strengthen our monetary policy framework, and we have established priorities in all areas of our operations to help us meet our strategic objectives. In 2002, the Bank set out a medium-term plan for the period 2003–05. The plan’s clearly defined policy frameworks and priorities were critical in guiding our analysis and our decisions in 2003, a year in which Canadians across the country were affected by a number of severe and unanticipated events.

The process that the Bank of Canada follows to make its monetary policy decisions has evolved over time. This process is very information-intensive and collaborative, drawing on the expertise, judgment and analysis of many people. This article describes monetary policy decision making at the Bank, and discusses some common misconceptions about monetary policy and the process.

The Annual Report outlines the Bank’s activities and achievements in 2017. It includes the financial statements and a message from Governor Stephen S. Poloz.

The Bank projects that growth in the Canadian economy will accelerate from 1.6 percent this year to 2 percent in 2021.

Inflation was near the 2% target in the fourth quarter of 2024, and interest rate cuts had bolstered economic growth. But since then, the trade conflict has intensified. Trade uncertainty and tariffs are expected to slow growth and add to price pressures.

At the time of the November 2000 Monetary Policy Report, although signs of the anticipated slowing of the U.S. economy were becoming apparent, the momentum of the global economy was considered strong.

As business people with ties to Canada and the United Kingdom, you are keenly interested in the economic prospects of both countries. When we look closely at our economies, it is striking how much they have in common in terms of policies and outlook.

The global economy has continued to grow at a robust pace since the July Monetary Policy Report Update.