This was the Bank of Canada’s first MPR since the dysfunctional switch from the CPIX to three new measures as the BoC’s operational guide and preferred measures of underlying inflation. To its disgrace, the Bank of Canada is now the only central bank in the world whose preferred core measures are sensitive to changes in mortgage rates. Chart 2-A in the MPR tries to show how “Preferred measures of core inflation have been better than CPIX at looking through sector-specific shocks”. A key evidence of this is supposed to be that during the 2008-09 recession  CPIX  generally tracked lower than the other core measures. For example, in August 2008 it was at 1.7%, which would at least seem to be consistent with the 50-basis point drop in the overnight rate in October, while the three new core measures were between 2.5% and 2.7%, which would really seem to call for an interest rate hike, not a drop. This is their evidence that these are new and better core measures! Unbelievable!