Rogers outlines Bank of Canada's stability role amid economic shifts

Canada is adapting to three major economic forces: evolving trade policy, demographic shifts, and the rise of artificial intelligence.

Uncertainty around US tariffs and global trade policy has suppressed business investment, impacting jobs and productivity.

Slowed immigration, a demographic factor, means fewer workers and consumers, hindering economic growth.

AI promises significant productivity gains but also generates anxiety about job impacts.

These changes require new approaches to economic analysis.

Senior Deputy Governor Rogers highlighted the ongoing renewal of the monetary policy framework, affirming the 2% inflation target's continued effectiveness.

The Bank is improving shock detection through real-time data and surveys, reviewing inflation assessment measures that exclude volatile items, and enhancing communication on inflation's path.

It also examines monetary policy's interaction with housing, aiming to explain how interest rates and market imbalances affect each other.

Public trust in the Bank's 2% inflation target proved crucial during the recent high inflation period.

Senior Deputy Governor Rogers stressed that long-term affordability requires improved productivity to raise incomes, but fundamentally starts with keeping inflation in check.

The Bank is also closely monitoring the situation in Iran.

Elevated oil prices would boost energy exports but also strain consumers and businesses.

These higher energy prices would push up near-term inflation, and the Bank aims to prevent such pressures from spreading and becoming entrenched.