tiff macklem : release of the monetary policy report opening statement by mr tiff macklem, governor of the bank of canada, at the press conference following the release of the monetary policy report, ottawa, ontario, 26 october 2022. * * * good morning. i'm pleased to be here with senior deputy governor carolyn rogers to discuss today's policy announcement and the bank's monetary policy report ( mpr ). today, we raised the policy interest rate by 50 basis points to 3. 75 %. this is the sixth consecutive increase since march. quantitative tightening continues and is complementing increases in the policy rate. we also expect our policy rate will need to rise further. how much further will depend on how monetary policy is working to slow demand, how supply challenges are resolving and how inflation and inflation expectations are responding to this tightening cycle. our decision today reflected several considerations. first, inflation in canada remains high and broad - based. inflation has come down in recent months, but we have yet to see a generalized decline in price pressures. second, and related, the economy is still in excess demand - it's overheated. households and businesses want to buy more goods and services than the economy can produce, and this is driving prices higher. third, higher interest rates are beginning to weigh on growth. this is increasingly evident in interest - rate - sensitive parts of the economy, like housing and spending on big - ticket items. but the effects of higher rates will take time to spread through the economy. fourth, there are no easy outs to restoring price stability. we need the economy to slow down to rebalance demand and supply and relieve price pressures. we expect growth will stall in the next few quarters - in other words, growth will be close to zero. but once we get through this slowdown, growth will pick up, our economy will grow solidly, and the benefits of low and predictable inflation will be restored. finally, we are trying to balance the risks of under - and over - tightening. if we don't do enough, canadians will continue to endure the hardship of high inflation. and they will come to expect persistently high inflation, which will require much higher interest rates and potentially a severe recession to control inflation. nobody wants that. if we do too much, we could slow the economy more than needed. and we know that has harmful consequences for people's ability to service their debts, for their jobs and for their businesses.

- system infrastructure, parallel to our work on the oversight of major payments systems and the provision of liquidity in canada, we have been studying these issues from a global perspective as members of various committees at the bank for international settlements. and we have been contributing to the development of standards for the sound operation of such systems. the bank has also been closely involved in international efforts to reduce the risks associated with the settlement of foreign exchange and securities transactions. finally, there is the issue of private sector involvement in crisis resolution. we all recognize that, even with the best prevention efforts, we will not totally eliminate the possibility that foreign economic and financial disturbances will affect national economies around the world. in the event of an emergency, the international community has agreed to new assistance facilities for distressed imf member countries. imf resources, however, are not limitless. so there is a need for the private sector to play a key role in the resolution of crises. greater clarity about the size of available official assistance is essential to encourage private sector debtors and creditors to work together to find solutions in difficult circumstances. and although we hope that most situations could be resolved voluntarily, it is important to recognize that, under certain conditions, an orderly standstill ( a temporary suspension of debt - service payments ) may be appropriate to give a distressed debtor country some breathing space in which to take steps to address its problems. broad international consensus on limits to official lending and on standstills is still lacking. so we will continue to work away at these issues. before summing up my main points today, i would like to give you a quick update on the canadian economy. recent economic developments in assessing the near - term course of the canadian economy, we are all facing a number of uncertainties. the most important relates to the abruptness and extent of the slowdown in the u. s. economy. the fact that the recent economic data for north america are mixed adds to this uncertainty. while these data confirm a slowing in the pace of activity, some have come in weaker, and some stronger, than expected. this is certainly the case here in canada. but even in the united states there have been both negative and positive reports. in the united states, the number of positive indicators, while not decisive, provides some hope that the end of the slowdown may not be far off. we continue to believe that u. s. economic growth will rebound in the second half of the year, supported by the decline in