Speech is defense of Bank of Canada's understanding of inflation
- Inflation behaving well within normal zone of tolerance
- inflation shortfall within reasonable margin of error
- economy likely to need less monetary stimulus over time
- The underlying inflation is well within the target range
- Bank of Canada will be cautious in adjusting policy rates
- premature to say something is amiss in inflation process
- Drag can persist until all labor slack is absorbed
- fundamental drivers and some special factors can explain recent behavior of inflation reasonably well
- total core inflation has firmed in the past couple months
- inflation has stayed in the lower half of target range even as output gap has been closing rapidly
- perception that inflation has become inexplicable has been greatly exaggerated
- Common sense says digital economy affecting prices; so far, cumulative impact not large enough to challenge understanding of inflation
