Archive · 2 Oct 2025
BOC: Markets Overemphasizing Core Inflation Gauges
The Bank of Canada is telling people not to focus too much on specific inflation numbers.
They use different ways to measure how prices are changing.
Currently, the measures they use the most show inflation is around 3%.
But, the bank thinks the true underlying inflation is closer to 2.5%.
The bank doesn't want the market to get too fixated on a single indicator.
The bank is looking at other ways to calculate inflation and will review its methods in 2026.
The bank lowered its interest rate to 2.5% in September.
The bank is also exploring the use of AI.
The Bank of Canada is suggesting markets are overly focused on its preferred inflation measures.
Deputy Governor Rhys Mendes spoke on the bank's core inflation assessment.
Preferred gauges of CPI-trim and CPI-median show inflation around 3%.
The bank views underlying inflation as being around 2.5%.
The bank is considering revising inflation gauges.
- Who
- The Bank of Canada (BOC)
- What
- Suggested markets are placing too much emphasis on its preferred core inflation measures.
- When
- Thursday
- Where
- London, Ontario
- Why
- To clarify its approach to measuring inflation and manage market expectations.
- Bank
- Bank of Canada
- Deputy Governor
- Rhys Mendes
- Preferred Inflation Gauges
- CPI-trim and CPI-median
- Preferred Gauge Inflation
- Around 3%
- Bank's Underlying Inflation View
- Around 2.5%
- Benchmark Policy Rate
- 2.5%
- Inflation Target
- 2%