we will be watching closely to see how the economy responds to higher interest rates. we ’ re not on autopilot. we will be looking for signs that the economy is returning to balance. just as canadians trusted us to respond with strength and conviction when the economy needed support at the onset of the pandemic, they are counting on us now to lower inflation. we take that trust seriously. we have the tools, we have the track record, and we are committed to getting inflation back to target. let me stop here. you ’ ve been an attentive audience, but an important part of being transparent and accountable is listening, and taking questions. so that ’ s what i ’ d like to do now. thank you. 6 / 7 bis central bankers'speeches 1 1. t. gravelle, “ market stress relief : the role of the bank of canada ’ s balance sheet ” ( speech delivered virtually to cfa society toronto, toronto, ontario, march 23, 2021 ). 2 2. t. macklem, “ the imperative for public engagement ” ( speech delivered virtually to the federal reserve bank of kansas city jackson hole symposium, jackson hole, wyoming, august 27, 2020 ). 7 / 7 bis central bankers'speeches

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, 1 / 2 bis - central bankers'speeches 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