{"id":272893,"date":"2025-10-02T21:48:16","date_gmt":"2025-10-02T21:48:16","guid":{"rendered":"https:\/\/www.europesays.com\/us\/272893\/"},"modified":"2025-10-02T21:48:16","modified_gmt":"2025-10-02T21:48:16","slug":"bank-of-canada-considers-changes-to-core-inflation-measures","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/us\/272893\/","title":{"rendered":"Bank of Canada considers changes to core inflation measures"},"content":{"rendered":"

Open this photo in gallery:<\/a><\/p>\n

The Bank of Canada building in Ottawa. Deputy governor Rhys Mendes says inflation is becoming more volatile with swings in U.S. trade policy, structural changes and geopolitical conflict.Adrian Wyld\/The Canadian Press<\/p>\n

The Bank of Canada<\/a> is considering changes to how it measures preferred inflation metrics to give it a better idea of how external shocks are affecting the economy, a senior official said on Thursday.<\/p>\n

Deputy governor Rhys Mendes said inflation was becoming more volatile given swings in U.S. trade policy, structural changes and rising geopolitical conflict.<\/p>\n

\u201cSo we need to think about how we assess \u2013 and talk about \u2013 underlying inflation as we confront this new reality,\u201d he said.<\/p>\n

The study into whether officials can do a better job of measuring underlying inflation will be part of a scheduled five-year view of the central bank\u2019s mandate with the government.<\/p>\n

Economy grows by more than expected in July after three monthly declines<\/a><\/p>\n

Bank of Canada will not review 2% inflation target in 2026, Macklem says<\/a><\/p>\n

The framework is up for renewal next year and the BoC has already confirmed that its mandate of keeping overall inflation at 2 per cent will not be touched.<\/p>\n

The bank has two preferred measures of core inflation which strip out the prices of more volatile items and are designed to give a more accurate idea of underlying pressures.<\/p>\n

CPI-median takes into account the central components of the consumer price index basket while CPI-trim excludes the most extreme price changes.<\/p>\n

\u201cWe\u2019re asking ourselves if there are ways we could improve our existing measures of core inflation,\u201d Mendes said, noting that every measure \u2013 no matter how well-designed \u2013 would at times send misleading signals.<\/p>\n

One option under review is the so-called multivariate core trend inflation, a method that isolates the persistent part of inflation and then splits it into two categories.<\/p>\n

The bank\u2019s existing measures made it hard to judge how movements in mortgage-interest costs affected inflation, he said.<\/p>\n

\u201cOne question we are asking … is whether we should revise our preferred measures and our alternative measures of core inflation so they all pre-exclude mortgage-interest costs. It\u2019s something we\u2019re considering carefully,\u201d he said.<\/p>\n

The bank is also mulling the use of artificial intelligence tools to measure core inflation, Mendes said, questioning whether it should continue to use the word \u201cpreferred\u201d when talking about core measures as it could give misleading signals.<\/p>\n

Mendes reiterated that most measures of inflation show that underlying inflation is around 2.5 per cent.<\/p>\n

This was one of the factors that helped persuade the bank to cut rates last month to 2.5 per cent, its first reduction in six months.<\/p>\n

\u201cWhen we looked ahead, we saw reasons to believe that underlying inflation would ease,\u201d Mendes said.<\/p>\n","protected":false},"excerpt":{"rendered":"Open this photo in gallery: The Bank of Canada building in Ottawa. Deputy governor Rhys Mendes says inflation…\n","protected":false},"author":3,"featured_media":272894,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[2148,2138,671,104,2132,692,64,2147,2131,2143,2144,2140,2133,2130,79,407,746,2142,2137,2159,2134,2135,454,2139,1165,728,2149,108,2154,2155,2157,2152,2156,2150,2153,2136,85,2146,80,2145,2151,1458,158,1164,2141,67,132,68,1154,107,2158],"class_list":{"0":"post-272893","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-alberta","9":"tag-arts-news","10":"tag-bc","11":"tag-breaking-news","12":"tag-breaking-news-video","13":"tag-british-columbia","14":"tag-business","15":"tag-canada","16":"tag-canada-news","17":"tag-canada-sports","18":"tag-canada-sports-news","19":"tag-canada-trafficcanada-weather","20":"tag-canadian-breaking-news","21":"tag-canadian-news","22":"tag-economy","23":"tag-education","24":"tag-environment","25":"tag-federal-government","26":"tag-foreign-news","27":"tag-globe-and-mail","28":"tag-globe-and-mail-breaking-news","29":"tag-globe-and-mail-canada-news","30":"tag-government","31":"tag-life-news","32":"tag-lifestyle","33":"tag-local-news","34":"tag-manitoba","35":"tag-national-news","36":"tag-new-brunswick","37":"tag-newfoundland-and-labrador","38":"tag-northwest-territories","39":"tag-nova-scotia","40":"tag-nunavut","41":"tag-ontario","42":"tag-pei","43":"tag-photos","44":"tag-political-news","45":"tag-political-opinion","46":"tag-politics","47":"tag-politics-news","48":"tag-quebec","49":"tag-sports-news","50":"tag-technology","51":"tag-travel","52":"tag-trudeau","53":"tag-united-states","54":"tag-unitedstates","55":"tag-us","56":"tag-us-news","57":"tag-world-news","58":"tag-yukon"},"share_on_mastodon":{"url":"","error":"Validation failed: Text character limit of 500 exceeded"},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/272893","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/comments?post=272893"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/272893\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/272894"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=272893"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=272893"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=272893"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}