Bank of Canada Says Near-Term Inflation Expectations Sensitive to Gasoline Prices but Longer-Term Expectations Remain Anchored

The Bank of Canada said near-term inflation expectations are sensitive to changes in gasoline prices. Longer-term inflation expectations remain well anchored, the central bank added in its latest assessment. War-related cost pressures are still working their way through some consumer prices.

These pressures are being offset by downward pressure on other prices from continued economic slack, the Bank of Canada stated. Uncertainty is still high, the central bank said. Canada’s economy is showing signs of improvement with sources of economic growth appearing to broaden.

Recent indicators point to continued solid consumer spending, according to the Bank of Canada. The central bank has dropped its reference to consecutive hikes.