mark carney : summary of the latest monetary policy report opening statement by mr mark carney, governor of the bank of canada, at a press conference following the release of the monetary policy report, ottawa, 24 april 2008. * * * today, we released our april monetary policy report, which discusses current economic and financial trends in the context of canada's inflation - control strategy. growth in the global economy has weakened since the january monetary policy report update, reflecting the effects of a sharp slowdown in the u. s. economy and ongoing dislocations in global financial markets. growth in the canadian economy has also moderated. buoyant growth in domestic demand, supported by high employment levels and improved terms of trade, has been substantially offset by a fall in net exports. both total and core cpi inflation were running at about 1. 5 per cent at the end of the first quarter, but the underlying trend of inflation is judged to be about 2 per cent, consistent with an economy that is running just above its production capacity. the u. s. economic slowdown is projected to be deeper and more protracted than in the january update. the projection reflects a more pronounced impact on consumer spending of the contraction in the u. s. housing market and significantly tighter credit conditions. the deterioration in economic and financial conditions in the united states will have direct consequences for the canadian economy. first, exports are projected to decline, exerting a significant drag on growth in 2008. second, turbulence in global financial markets will continue to affect the cost and availability of credit. third, business and consumer sentiment in canada is expected to soften somewhat. nevertheless, domestic demand is projected to remain strong, supported by firm commodity prices, high employment levels, and the effect of cumulative easing in monetary policy. the bank projects that the canadian economy will grow by 1. 4 per cent this year, 2. 4 per cent in 2009, and 3. 3 per cent in 2010. the emergence of excess supply in the economy should keep inflation below 2 per cent through 2009. both core and total inflation are projected to move up to 2 per cent in 2010 as the economy moves back into balance. there are both upside and downside risks to the bank's new projection for inflation ; these risks appear to be balanced. in line with this outlook, some further monetary stimulus will likely be required to achieve the inflation target over the medium term. given the cumulative reduction in the target for the overnight rate of 150

##a is the pride that its staff members take in providing objective analysis. that devotion first and foremost to objectivity has led to the interesting phenomenon that, while the overall economic views of administrations have swung widely, the policy advice given by their successive ceas has undergone far smaller swings. even though the average tenure among members of the council and staff economists is short - - often just a year or two - - there have been some sources of continuity. perhaps the most remarkable element of continuity has been the service of catherine furlong, better known to her friends and colleagues as " kitty. " she recently retired after fifty - four years of service, with her tenure extending back to the earliest years of the agency during the truman administration. among other important roles, kitty was the fact - checker - in - chief at the cea - - an important position when the stock of the agency depends critically on its credibility. for presidents on down, having your material fact - checked by kitty meant that you were going to meet the gold standard of credibility. the type of continuity she provided is rare in the government and contributed to the cea's success over the years. among its contributions, the cea serves as an in - house research organization that can assemble, analyze, and present information relevant to an economic decision. many of the members and staff come from research backgrounds and are uniquely positioned to play this role in the administration. because the cea has retained its small size over the years, it can be quick and nimble in ways that are difficult for some larger agencies. moreover, because the cea is viewed as a neutral agency without ties to any particular constituency, the cea often has played an important role on interagency committees and working groups, ensuring that economic insights are heard at debates about key issues. along those lines, perhaps the most important role of the cea has been to scuttle many of the more adventuresome ideas that inevitably bubble up through the machinery of government. in every administration, all sorts of ideas for changes in spending, tax, and regulatory policy are developed by one agency or another and then circulated within the administration. a few of these ideas are genuinely good. however, many of them are ill - advised and not well thought through and fail miserably the test of benefits exceeding costs. often, it falls to the cea to point out the flaws and derail these ideas. this role of the cea is wholly unheralded - - after