Getting inflation back to target

Our strong recovery continues

In January’s Monetary Policy Report , we told Canadians that the emergency monetary policy put in place to support the economy through the pandemic was no longer needed. We ended our exceptional forward guidance and signalled that a rising path for interest rates was on the horizon.

Since then, economic conditions have unfolded largely as we expected. GDP growth in the fourth quarter of 2021 was strong at 6.7%, reinforcing our view that the economy is once again producing at its full capacity. Inflation remains too high at around 5%. The invasion of Ukraine is pushing up prices for both energy and food-related commodities. This is a major new source of uncertainty.