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Discussion of recent research into three ways that oil-futures prices can improve our understanding of current conditions and future prospects in the global market for crude oil; inflation expectations and the conduct of monetary policy: a review of recent evidence and experience; examination of the influence of various forms of economic uncertainty on the performance of different classes of monetary policy rules; how, when, and why such revisions to many important economic variables occur.

While climate change was largely tackled by government policies in the past, central banks are increasingly grappling with the risks climate change poses. They are evaluating their operational policies to reflect these risks and the transition to a net-zero economy. This paper explores the trade-offs and considerations central banks face.

Governor Stephen S. Poloz talks about key issues for the Bank at the beginning of 2020.

The Canadian economy is now clearly in excess demand, and inflation is high and broadening. The Bank is projecting inflation to decline to about 3% by the end of 2023, and to return to the 2% target by the end of 2024.

At the onset of the pandemic, the Bank of Canada transitioned its framework for monetary policy implementation from a corridor system to a floor system, which it has since decided to maintain. We provide a comprehensive analysis of both frameworks and assess their relative merits based on five key criteria that define a sound framework.

The fourth generation of Bank of Canada projection and policy analysis models seeks to improve our understanding of inflation dynamics, the supply side of the economy and the underlying risks faced by policy-makers coming from uncertainty about how the economy functions.

Monetary policy is working to reduce price pressures in the Canadian economy. Core inflation is expected to ease gradually, while the path of CPI inflation will be bumpy. Inflation returns sustainably to the 2% target in the second half of 2025.

Projections for Canadian economic growth have been increased to 3.1 per cent this year and 2.1 per cent in 2018, with growth of 1.5 per cent forecast for 2019.

The Bank’s new forecast calls for real economic growth of 1.2 per cent this year, 2.1 per cent next year and 2.0 per cent in 2021.

We break down the exchange rate based on an explicit link between fixed income and currency markets. We isolate a foreign exchange risk premium and show it is the main driver of the exchange rate between the Canadian and US dollars, especially on monetary policy and macroeconomic news announcement days.