Analysis: The Bank of Canada is concerned about the CPI risks brought by supply shocks.

Bradley Sanders, a macro strategist at Capital Economics, said that the Bank of Canada recognizes the risks that supply shocks pose to inflation, such as the current situation of restricted passage of oil tankers through the Strait of Hormuz. The economist told The Wall Street Journal that the Bank of Canada hopes to avoid repeating the mistakes made during the COVID-19 pandemic. However, Sanders also noted that Canada's GDP growth is likely to fall well below expectations in the fourth quarter of 2025 and the first quarter of this year, indicating that excess capacity may be accumulating. He stated that decision-makers at the Bank of Canada want to "avoid making decisions that may need to be reversed in the future, especially as renegotiations of the USMCA are set to officially begin in the coming months."