The Financial Post reports in its Thursday, May 7, edition that the Bank of Canada is mulling clarifying its response to supply shocks in its monetary policy, particularly regarding the economy's strength in addressing inflation. A Bloomberg dispatch to the Post reports that the BOC updates its framework every five years, with the next review due by the end of 2026. Policy makers argue that it should address a more volatile inflation environment influenced by rising global protectionism, geopolitical tensions and the impact of artificial intelligence. Governor Tiff Macklem said last month, "We are living in a world that is more prone to supply shocks, which are difficult for monetary policy." Such shocks, he said, create a "dilemma" because central banks cannot stabilize both inflation and growth simultaneously. Mr. Macklem emphasized that the bank must consider the economy's position relative to its potential and evaluate the output gap before deciding to adjust interest rates, especially when inflation is driven by supply constraints instead of demand. Mr. Macklem said, "We want to be as clear as we can up front about what we think our reaction function would look like in different circumstances."