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  • "Even as the complications of reopening the global economy have caused inflation in Canada and many other countries to rise, medium and longer-term inflation expectations in Canada have remained well anchored on our inflation target. Keeping inflation expectations well anchored is key to completing the recovery and getting inflation back to target," Governor Tiff Macklem said in a speech Wednesday.
  • "Our renewed (inflation targeting) agreement also articulates more clearly how we will continue to use the flexibility that is built into our framework. This includes the use of extended monetary policy tools when needed and the increased emphasis we have been placing on the health of the labour market."
  • "Our economic recovery is now well advanced. But as we are all aware, the global economic rebound has generated elevated inflation in Canada and many countries. To a large extent, this reflects the unique circumstances of the pandemic. With global demand recovering faster than disrupted supply chains can respond, the prices for many goods have increased sharply. While we expect inflation to ease in the second half of 2022, we are closely watching inflation expectations and wage costs. And we will ensure that the forces pushing up prices do not become embedded in ongoing inflation. Our framework enables us to do just that."
  • "We turned to other policy tools, including forward guidance and quantitative easing. A lower neutral interest rate means we are likely to need to use these policy tools more often in the future. These alternative tools work, but we don’t have as much experience using them."
  • "What comes through clearly is that flexible inflation targeting is hard to beat in theory and in practice. Its 30-year record of success has demonstrated that it is built for all seasons."
  • "Having ended quantitative easing, we are now focused on our forward guidance—on assessing the diminishing degree of slack in the economy and on bringing inflation sustainably back to target."
  • "An implication of exceptional forward guidance is that inflation will likely go a little above the target after we exit from the ELB (effective lower bound) before it comes back to the target over the medium term. When we use forward guidance in this way, we will communicate this inflation dynamic clearly. Interestingly, the benefit of average inflation targeting relative to flexible inflation targeting is that it allows this kind of overshoot in inflation at the ELB."