##ing and larger - than - normal price increases remain broad - based across the goods and services canadians buy regularly. just as it took longer to see clearer evidence that higher interest rates were moderating demand in the economy, it may now be taking longer for this to translate into lower inflationary pressures. we know it takes time for interest rate increases to work their way through the economy and relieve price pressures. the other possibility, of course, is that monetary policy is not yet restrictive enough to restore price stability. and unfortunately, the longer we wait, the harder it ’ s likely to be to reduce inflation. in trying to balance the risks of under - and over - tightening, governing council decided yesterday to keep the policy rate at 5 % and agreed there may be a need to raise the policy rate further if inflationary pressures persist. going forward, we will be looking for further evidence that price pressures are easing. to assess the momentum in inflation, we use a broad range of indicators. each month, inflation data are buffeted by many factors, some temporary, others more lasting. given that monetary policy works with a lag, we need to try to see where inflation is going. so let me now dig into the data and unpack what we are seeing and what we are looking for. unpacking inflation we ’ ve been saying for some time that inflation would be close to 3 % this summer. it fell to 2. 8 % in june before moving up to 3. 3 % in july, so we are about where we expected ( chart 1 ). chart 1 : year - over - year inflation has declined % jan - 2020 jul - 2020 jan - 2021 cpi - median source : statistics canada last observation : july 2023 jul - 2021 jan - 2022 cpi - trim jul - 2022 jan - 2023 total cpi - 2 jul - 2023 - 3the biggest contribution to the slowing in inflation since the peak last year has been from energy, which accounts for two - thirds of the slowdown ( chart 2 ). price increases in consumer durables like furniture and appliances have also slowed as supply disruptions eased and higher borrowing costs reduced demand. chart 2 : prices of gasoline and consumer durables * have contributed to the fall in inflation from the recent peak june 2022 – july 2022 - 1 - 0. 11 percentage points - 0. 15 - 1 - 0. 37 - 2 - 2 - 0. 99 - 3 - 3 - 4 - 4 - 5 -

philipp hildebrand : the swiss national bank ’ s ability to act in the crisis summary of a speech by mr philipp hildebrand, vice - chairman of the governing board of the swiss national bank, at the executive mba hsg, universitat st gallen, st gallen, 21 january 2009. the complete speech can be found in german on the swiss national bank ’ s website ( www. snb. ch ). * * * the global financial system is in the midst of the biggest crisis of the postwar years. above all, the crisis is the most complex of this period. problems in the us sub - prime mortgage market led to the breakdown of both markets and general trust. in particular, the interbank market, the nerve centre of the financial markets, froze up for several months. governments and central banks managed to prevent the financial system from collapsing. the interbank market has been revived and risk premia have come down from their former record levels. in the meantime, however, the financial crisis has worked its way through into the real economy, which is now moving into a sharp downturn. in order to fight the crisis, the central banks have lowered their key interest rates aggressively. the instrument of the swiss national bank ( snb ), the repo rate, has practically reached zero. however, this certainly does not mean that the snb is incapable of action. if needed, there are other options available. the national bank can extend the terms of repo transactions or give consideration to the purchase of government and corporate bonds. where necessary, the snb may also, for example, sell an unlimited amount of swiss francs against foreign currency in order to prevent an appreciation of the swiss franc or even to bring about a devaluation of the national currency. the snb is very well aware that the determined route it is pursuing in fighting this historic crisis is associated with long - term risks. at the same time, it is firmly convinced that the risks involved in not following this course would be considerably greater. in this spirit, it is facing up to the task of fighting the crisis while at the same time maintaining a watch on the longterm aspects. at some point, the moment will come when the national bank decision - makers will need the courage to do what is right in the long term even if it is not popular in the short term.