, in combination with expectations about our future policy stance and other factors, influences pricing along the entire yield curve, as well as a range of other asset prices. these, in turn, have a material impact on the economic decisions of households and businesses. 5 ideally, we prefer the overnight market to clear on its own at close to the target rate through market forces rather than through our operations. we encourage this with an interest rate corridor, which is reinforced by standing deposit and lending facilities available to the participants in the payment system. 6 the corridor helps drive them to clear at the midpoint, which is the target rate. that ’ s the theory, and it works well in practice. however, there can be frictions. the bank of canada act and the payment clearing and settlement act ( pcsa ) together give the bank the power to make secured loans or advances to members of the canadian payments association and operators of financial market infrastructures designated for oversight under the pcsa. the bank can also purchase debt securities from any counterparty for the purposes of conducting monetary policy or promoting the stability of the financial system, subject to the policies established by the bank. the bank also retains the option of taking action between fixed announcement dates, although it would exercise this option only in extraordinary circumstances. setting the overnight rate is the first stage of a long transmission mechanism by which monetary policy decisions ultimately affect inflation. the corridor is one - half of a percentage point wide and has the target for the overnight rate at its centre. see “ a primer on canada ’ s large value transfer system ” and “ a primer on the implementation of monetary policy in the lvts environment ”. bis central bankers ’ speeches for example, sometimes the interest rate that is transacted in the overnight market starts to move off target during the day. the bank typically intervenes if it judges that the deviation is the result of generalized pressures on liquidity in the overnight market, rather than because of firm - specific reasons. for such intraday frictions, the bank can use repurchase or repo transactions called special purchase and resale agreements ( spras ) or sale and repurchase agreements ( sras ) to add or withdraw intraday liquidity to or from the system to offset these pressures. so how we can we reduce the frictions and help enhance the flow of liquidity? proposals for the overnight market we are proposing to adjust the format of these spra ( and sra ) operations from offering primary dealers

moderating, although it remains elevated. 1 / 2 bis - central bankers'speeches looking ahead, economic growth is expected to increase in the second half of 2024 and through 2025. this reflects stronger exports and a recovery in household spending as borrowing costs ease. business investment is also expected to strengthen as demand picks up, and residential investment is forecast to grow robustly. overall, with the economy strengthening, excess supply will be absorbed next year and into 2026. cpi inflation moderated to 2. 7 % in june after increasing in may, and broad inflationary pressures continued to ease. the bank's preferred measures of core inflation have now been below 3 % for several months and the breadth of price increases across components of the cpi is near its historical average. corporate pricing behaviour has largely normalized, and near - term inflation expectations have come down, although they are still above normal. however, shelter price inflation remains high. inflationary pressures are also evident in services that are closely affected by wages, such as restaurants and personal care. the bank's preferred measures of core inflation are expected to slow to about 2a½ % in the second half of 2024 and ease further in 2025. cpi inflation is forecast to come down below core this fall and settle sustainably around the 2 % target next year, but it's unlikely to be a straight line. as always, there are risks around our inflation outlook. globally, geopolitical uncertainty is high. here in canada, the biggest downside risk is that household spending could be weaker than expected. on the upside, inflation in shelter and other services could prove more persistent. let me conclude. with broad price pressures continuing to ease and inflation expected to move closer to the 2 % target, governing council decided to reduce the policy interest rate by a further 25 basis points. in recent months, we have continued to make progress bringing inflation down. with the target in sight and more excess supply in the economy, the downside risks are taking on increased weight in our monetary policy deliberations. we need growth to pick up so inflation does not fall too much, even as we work to get inflation down to the 2 % target. we are carefully assessing the downward pull on inflation from ongoing excess supply, and the pressures from shelter and other services that are holding inflation up. monetary policy decisions will be guided by incoming information and our assessment of their implications for the inflation outlook. the bank remains resolute in its commitment to restoring price