Statistics Canada has announced that the inflation rate for March fell to 1.9 %. This is exactly opposite to what a number of conventional economists including those who hold influential positions at the Bank thought would be the case. The Bank of Canada Governor recently made aggressive noises in the direction of raising interest rates in future interest rate settings on account of what now turns out to be very mythical inflationary pressure. The fact is the Canadian economy is slowing down and the pace of recovery while still positive shows absolutely no sign of provoking inflation. Whatever inflationary pressures exist lie in the oil sector and to a certain extent in foodstuffs that are speculated on in the futures markets. In neither of these cases would raising interest rates be a sensible policy response.
Both charts courtesy of Statistics Canada