Bank of Canada governor Tiff Macklem says flexibility is key as the bank prepares to review its rate-setting framework in a world undergoing an economic sea change.
Macklem discussed the upcoming mandate review in a speech in Mexico City today as that country’s central bank marked its 100th anniversary.
In his prepared remarks, Macklem noted the shift to an inflation-targeting framework in the 1990s and suggested adaptation is required to address new economic trends and global trade changes.
As the Bank of Canada gears up for the 2026 mandate review, Macklem said the committee is examining how the central bank can use “flexibility in the framework” to respond to supply shocks.
He added the bank will review the best indicators to measure core inflation.
Macklem also said the bank will study the interaction between monetary policy, housing affordability and inflation — along with housing demand, which heavily depends on interest rates.