The quarterly Business Outlook Survey showed companies expect inflation will be around three per cent in two years, down from 3.2 per cent previously. They also described demand as weak, one of the reasons they plan to significantly cut back investment plans. The central bank’s separate quarterly survey of consumer expectations suggests households think inflation has slowed, although their price perceptions remain out of sync with official readings. (The Logic) 

Talking point: The surveys will inform the Bank of Canada’s next interest rate decision on April 10. Key is what they say about the vibes around inflation. Businesses appear to doubt policymakers will hit their two per cent target, but expectations around three per cent are probably close enough for comfort. Consumers, however, see inflation at about 4.9 per cent in 12 months. That matters because expectations can become self-fulfilling prophecies. Wage pressures appear to be easing and fewer businesses said they plan to make frequent price changes, something policymakers said they would need to see before they cut rates. There probably isn’t enough here to justify a cut in April, but June remains a possibility.