longer needs to be as restrictive. in other words, it is appropriate to lower our policy interest rate. if inflation continues to ease, and our confidence that inflation is headed sustainably to the 2 % target continues to increase, it is reasonable to expect further cuts to our policy interest rate. but we are taking our interest rate decisions one meeting at a time. we don't want monetary policy to be more restrictive than it needs to be to get inflation back to target. but if we lower our policy interest rate too quickly, we could jeopardize the progress we've made. further progress in bringing down inflation is likely to be uneven and risks remain. inflation could be higher if global tensions escalate, if house prices in canada rise faster than expected, or if wage growth remains high relative to productivity. in assessing where inflation is headed, we will continue to closely watch the evolution of core inflation. we remain focused on the balance between demand and supply in the economy, inflation expectations, wage growth and corporate pricing behaviour. with that summary, the senior deputy governor and i would be pleased to take your questions. 2 / 2 bis - central bankers'speeches

. financial markets first, international financial markets. since the unrest of march 2020, risky behaviour among investors has increased sharply again. spurred on by low interest rates, investors are sailing close to the wind and the appetite for risk is high. this is reflected in high price - to - earnings ratios on equity markets, ever - lower risk premiums on risky bonds, and historically high issuance levels of risky corporate debt, which is often also highly leveraged. this risky behaviour is only sustainable at low inflation and interest rates. increasing inflation is making financial markets jittery, fuelled by fears of a tightening in monetary policy and rising 1 / 2 bis central bankers'speeches inflation. and that is precisely what we have been seeing on the stock markets in the past few weeks : sentiment is less exuberant, as inflation is again back on investors ’ radar. i also still expect that the inflation shock we are currently witnessing is largely temporary. nonetheless, from the perspective of healthy risk management, it is also important to take other scenarios into consideration. also because the 1970s taught us that we do not have an unlimited capacity for envisaging how temporary inflation is. if financial markets fail to take sufficient account of scenarios involving persistently high inflation and its accompanying interest rate environment, it could lead to shock price falls in the future. housing market on to the dutch housing market. it won ’ t have escaped anyone ’ s attention that house prices have risen even more steeply this year. over the past five years house prices have on average risen by 8 per cent annually, but we have recently seen nationwide annual rises of over 15 per cent. house prices are also rising faster in the netherlands than elsewhere in europe, so this cannot be ascribed solely to low interest rates. there is a persistent shortage on the supply side of the housing market, and additional housing construction efforts are certainly required. however, housing shortages have always existed and will probably never completely disappear in a densely populated and neatly organised country like the netherlands. the exuberant rise in house prices has more to do with dutch households ’ borrowing capacity. there is quite simply too much money and too few houses. buyers are stretching the boundaries to place the winning bid, displaying increasingly risky lending behaviour. particularly first - time home buyers are more often borrowing at the limit relative to their income. it is still possible to finance the full value of a property with a mortgage. interest - only mortgages are again becoming popular. the many tax advantages available serve to drive