Segmented Inflation Dynamics (SID) : identifying trend inflation from the price index / André Binette [and] Colleen Smith. : FB3-8/2026-43E-PDF

"This paper presents Segmented Inflation Dynamics (SID), a data-driven tool for assessing trend inflation. SID uses time-series segmentation to divide the price index into contiguous segments with stable inflation rates. The segmentation breaks are identified from the data. The slope of each segment provides a well-defined estimate of trend inflation that is stable but responsive to persistent shifts. Using Canadian data from 1992 to 2025, the paper describes the resulting inflation segments, tests the robustness of the method and assesses its real-time properties. The results show that SID offers an interpretable measure of trend inflation, with limited sensitivity to short-term volatility and a quick adjustment to shifts in inflation dynamics. Based on data through December 2025, SID indicates that trend inflation in Canada has been close to 2 percent since early 2024"--Abstract, page ii.

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