Hitting the Inflation Mark Means Aiming for a Recession

To hit its inflation mark, the Bank of Canada might be aiming for a recession. A monetary-policy-induced recession in Canada became our base-case forecast early this summer. Recent data releases—and the Bank of Canada’s reaction to them—have reinforced that view. While some shops are still debating whether a recession is on the horizon, we’re now wondering whether it will be only a mild downturn.