Bank of Canada Governor Confirms No Review of 2% Inflation Target in the Coming Year

Bank of Canada's Inflation Target: The Bank of Canada will not reconsider its 2% inflation target during the upcoming monetary policy framework review in 2026, as it has effectively anchored inflation expectations.

Economic Uncertainty: Governor Tiff Macklem highlighted the increasing economic uncertainty due to U.S. tariffs and supply chain shifts, which could lead to upward pressure on inflation.

Focus on Supply Shocks: Ahead of the review, the Bank of Canada is examining how to respond to supply shocks and improve measurements of core inflation amidst these challenges.

Monetary Policy Stability: The Bank of Canada has maintained steady interest rates at 2.75% over the last three meetings, emphasizing that while central banks cannot eliminate uncertainty, they can adapt their decision-making processes.