at the end of august, to support domestic demand growth and to keep inflation near the target of 2 per cent over the medium term. and in our press release of 28 august we indicated that, given the continuing uncertainties in the global economy, particularly the timing and strength of the recovery in investment in the united states, and the uncertainty surrounding domestic demand growth in canada, we would continue to monitor developments closely. last week ’ s tragic developments in the united states, and their reverberations around the world, obviously bring with them further uncertainty with respect to the timing and extent of a rebound in economic activity. although it is too early to fully assess the likely consequences for our economy, the bank ’ s initial efforts involve trying to estimate the direct effects of disruption in sectors such as transportation, finance, and tourism. the terrorist attacks on the united states will also affect consumer and business confidence worldwide, including here in canada. it is precisely for this reason that we moved promptly this week to lower interest rates by one - half of one percentage point. this action, which leaves short - term interest rates 2 1 / 4 percentage points lower than at the beginning of the year, aims to provide further support for economic growth in canada. the bank also recognizes that a key factor in preserving the confidence of canadians in the prospects of our economy is a financial system that continues to function effectively. that is why, as i said earlier, we took steps, together with the other g - 7 central banks, to inject liquidity into the financial system to support its smooth functioning in the wake of the tragic events in the united states. we stand ready to do so whenever necessary. but it is encouraging that at this juncture, with each passing day, we seem to be moving back to a more normal state of affairs in the financial system. right now, it is difficult to look too far ahead in terms of the economic implications for canada of last week ’ s events. nevertheless, economic growth in the third quarter will likely be close to zero or slightly negative, and we will continue to feel the adverse effects into the fourth quarter. with the economic slack that is opening up, we continue to see core inflation falling to about 2 per cent by year - end. we also project that total cpi inflation will drop to close to 2 per cent over the same period, assuming that energy prices remain near current levels. there is a risk that world oil prices could rise sharply, depending on the fallout from last week ’

remarks by timothy lane deputy governor of the bank of canada haskayne school of business university of calgary calgary, alberta october 1, 2018 decrypting “ crypto ” introduction good afternoon. some of you here today may have purchased bitcoins or one of the other cryptocurrencies or products that have launched in recent years. i ’ m not here to give you investment advice about them. rather, i want to share with you our current thinking about these virtual products. investors worldwide have taken an increasing stake in them over the past few years, even as their market values have fluctuated widely. around 2, 000 crypto products are now available, with dozens more launching every month. 1 trading volumes have grown almost 100 - fold in just the past two years. media interest in them has inflated at a similar pace, often including a thick layer of hype. the recent collapse in the market valuations of many cryptoassets — almost 40 per cent of those originally launched are now worthless — seems to have done little to dampen enthusiasm. 2 some investors see these products as potentially world - changing ; others as an example of “ popular delusions and the madness of crowds. ” 3 possibly both are right. new financial or technological innovations often ignite market bubbles as users race to discover their most popular and profitable applications. think of the “ dot - com ” bubble of the late 1990s, when prices of many internet - related stocks shot into the stratosphere. while that period ended in tears for many investors, a handful of new companies that rose at that time, such as google and amazon, have brought about profound changes in the way we work, play, shop and live. the bank of canada is not responsible for regulating these crypto products. indeed, the term “ cryptocurrencies ” is a misnomer. we prefer to call them 1 see coinmarketcap. com. 2 there is now even a website, deadcoins. com, that lists the failed cryptoassets and the reasons they collapsed. 3 c. mackay, memoirs of extraordinary popular delusions and the madness of crowds ( london : richard bentley, 1841 ). i would like to thank james chapman and scott hendry for their help in preparing this speech. not for publication before october 1, 2018 1 pm eastern time - 2 “ cryptoassets ” because, as i will discuss in a moment, they don ’ t do a good job of performing the