Ivey Business School hosted Deputy Governor Rhys Mendes for a talk on the renewal process of the Bank of Canada’s monetary policy framework, focusing in particular on how the Bank measures core inflation in a more shock-prone world.
He explained how the structural tailwinds of peace, globalization, and favourable demographics have shifted into headwinds. Global trade is being rewired, and new technologies have proven disruptive. With these large, structural changes have come more frequent and significant shocks — leading to greater inflation volatility.
In this environment, cutting through the noise is more important than ever. Mendes noted that the Bank’s role is to support the Canadian economy by keeping overall inflation close to 2%. Core inflation measures help the Bank achieve this goal by filtering out short-term fluctuations.
Attendees gained insight into how the Bank uses measures of core inflation and other indicators to determine whether inflation movements are temporary or persistent, and what key questions the Bank is exploring ahead of its 2026 framework renewal. The event offered valuable perspective for anyone interested in understanding how the Bank approaches inflation in its policy deliberations.
For more information on the review and renewal of the monetary framework, click here.
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Ivey Communications | Cutting through the noise: Addressing the future of Canada's monetary policy
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