2025. 1 / 2 bis - central bankers'speeches what does all of that mean for inflation? we've come a long way from the 8. 1 % inflation we saw last summer. as i mentioned, annual cpi inflation was down to 4. 3 % in march, led by falling goods price inflation, and we see further declines ahead. that's good news. but many canadians are still struggling to manage the rising cost of living, and prices of many things that people need to buy are still rising too quickly. food price inflation is just under 10 %. we expect food price inflation to come down in the months ahead, but services price inflation will take longer. continued strong demand and the tight labour market are putting upward pressure on many services prices, and those are expected to decline only gradually. we expect it will take until the end of 2024 to get inflation all the way back to the 2 % target. when we met last week, the bank's governing council discussed whether we've raised rates enough, and we considered the likelihood that the policy rate may need to remain restrictive for longer to return inflation to the 2 % target. governing council also discussed the risks around our projection. the biggest upside risk is one i just mentioned - that services price inflation could be stickier than projected. the key downside risk is a global recession. if global banking stress re - emerges, we could be facing a more severe global slowdown and much lower commodity prices. overall, we view the risks around our inflation forecast to be roughly balanced, but with inflation still well above our target, we continue to be more concerned about the upside risks. let me conclude. our job at the bank of canada is to get inflation all the way back to the 2 % target. we are encouraged with the progress so far. and seeing inflation get down to 3 % this summer will be welcome relief for canadians. but let me assure canadians that we know our job is not done until we restore price stability. price stability is important because it restores the competitive forces in the economy and allows canadians to plan and invest with the confidence that their money will hold its value. that's the destination - we are on our way and we will stay the course. with that summary, the senior deputy governor and i would be pleased to take your questions. 2 / 2 bis - central bankers'speeches

related effect, these operations by the federal reserve – together with the unconventional policies of central banks of other major economies – have pushed the volatility of financial assets down to near historically low levels ( chart 3 ). the resulting exceptionally buoyant financial conditions suggest that risk and vulnerability have increased in the financial system. but, during this period, returning the united states to sustained economic growth has been of paramount importance. while there was some concern that qe could have resulted in runaway inflation, that hasn ’ t happened. in fact, the u. s. economy remained weak and inflation mainly below the federal reserve ’ s target. that ’ s because qe was being carried out in the context of the widespread bis central bankers ’ speeches private sector deleveraging after the financial crisis ; and, despite the unprecedented scale of the operations, it was still not enough to break the economy out of its post - crisis funk. canada : innocent bystander? here in canada, we didn ’ t have a homegrown financial crash. while the bank of canada acted promptly and aggressively to provide liquidity to keep financial markets functioning, no banks had to be rescued and house prices didn ’ t plunge. this is not to say we were lily pure. in fact, in 2007, a specialized canadian market collapsed – the market for non - banksponsored asset - backed commercial paper ( abcp ). it was only through timely and forceful action by the public and private sectors that this situation was resolved without generating wider fallout. nevertheless, the recession in canada was painful. this was mainly because our exports collapsed. it ’ s not just that about three - quarters of our exports go to the united states, but also that they are linked to sectors of the u. s. economy, such as housing and business investment, that fared particularly badly in the recession. to get us through this period of very weak exports, we also relied on stimulative monetary policy. like the united states and other advanced economies, we lowered rates to their “ effective lower bound ” – in our case, 1 / 4 per cent. unlike the united states, we did not need qe, although we did provide forward guidance for our policy rate, itself a form of unconventional monetary policy, for the year following april 2009. our financial system was more robust, so easy monetary policy was transmitted into expanding credit for canadian households and companies. in contrast with the united states, we had a buoyant, albeit