Waller: Two Thoughts on the Transmission of Monetary Policy

FED'S WALLER: FED POLICYMAKERS HAVE ALWAYS BEEN COMMITTED TO INFLATION TARGET, IT IS A ‘CREDIBLE PLEDGE’ Fed's Waller: The risks have flipped around, the labor market seems stabilized, and inflation has been taking off, which changes how you think about policy. Fed's Waller when asked about Warsh recommitting to the inflation target: He has never been anything but committed.

The Business Outlook Survey was conducted by in-person, video and phone interviews from May 1 to 21, 2026. The Business Leaders’ Pulse is conducted online every month; the latest results are from April, May and June 2026. This quarter’s publication also includes results from special consultations with business leaders and industry experts in the oil and gas sector. • Overall business sentiment has deteriorated after improving over the past three quarters. • Sales outlooks have softened slightly, reflecting a slowdown in business and consumer spending associated with rising fuel-related costs and heightened geopolitical uncertainty in the Middle East. • Firms’ export outlooks have improved. Fewer firms said trade uncertainty and hesitancy among US customers are constraining exports, and more firms reported strong demand for commodity exports. • Most firms did not report binding capacity constraints or labour shortages. Reports of difficulties sourcing critical inputs increased this quarter, but these were generally not viewed as limiting firms’ ability to meet demand. Canadian Survey of Consumer Expectations—Second Quarter of 2026 Consumers’ perceptions of current inflation and expectations for inflation over the next 12 months were little changed, while two-year-ahead expectations rose slightly (Chart 1, blue, yellow and green lines). Near-term expectations remain above levels seen before the start of trade tensions. Expectations for inflation over the next five years edged up after easing in recent quarters (Chart 1, red line). The share of consumers expecting inflation to be above 3% over the next 12 months increased slightly from last quarter (Chart 2, red and orange bars). Consumers continued to cite tariffs and trade tensions as the most important factor affecting inflation (Chart 3). In follow-up interviews, one respondent said, “Where I work, a lot of raw material is used. ... [Tariffs have raised] substantially the price of the item itself plus the cost to ship it, so we have to pass that cost on to our customers.” BoC Business Outlook Survey: Business Sentiment Weakens, Inflation Expectations Edge Higher BANK OF CANADA BUSINESS SENTIMENT INDEX -0.39 IN Q2 VS. -0.35 IN Q1, (REVISED FROM -0.36 PREVIOUSLY), -2.41 IN Q2 2025 #Canadaecon #canada #business #economy

Israeli forces triggered explosion in southern Lebanon overnight, state media report