Bank of Canada's Schembri
- Talks about three new core BOC inflation measures
- Excess capacity has increased due to commodity price drops
- Core measures diverging
- Full speech
If you're interested in what the BOC is doing on inflation, this is a good speech to read. The central bank is moving away from a single measure of core inflation and using three different readings to try to get a clearer picture. He also outlines the shortfalls of different ways of looking at inflation.
Key quote: "In the absence of exchange rate pass-through and other unexplained factors, all three preferred measures of core inflation would be below two per cent, broadly consistent with the Bank's assessment of the degree of excess capacity in the Canadian economy."
