As you pointed out, there is tremendous uncertainty in the world.
Geopolitically speaking, the tensions between the U.S. and China, in particular, are clearly continuing to mount. In the short term, we are committed to bringing inflation down to target. Yes, there is a risk that a sudden event could affect supply chains. However, I'd like to talk about the longer-term situation, as I did in December, in British Columbia.
Over the past 20 or 30 years, China's entry into the global economy and its growing supply chains have helped lower the inflation rate, especially for traded goods. It is very likely that that will cease in the future. In fact, the opposite could happen, so we could see more pressure on goods prices for quite a while. That's something we have to take into account when setting a target inflation rate.
From time to time, some suggest that, once inflationary pressure has ended, it may be necessary to raise the inflation target. We think that would be a serious mistake for two reasons.
First, when inflation is low, Canadians can count on the fact that the cost of living will not change significantly. If inflation goes up every year, the rise in the cost of living will be greater.
Second, the situations you described could certainly happen in the future, but a higher inflation target would make it harder to respond to those realities.