advanced economies. greater global demand would in turn translate into higher exports for canada and rising commodity prices, which would support higher incomes and spending. • a second important external risk is a more protracted and difficult euro - area recovery. since canada ’ s direct trade links to the euro area are limited, the effects would be felt mainly through confidence and financial channels, as well as through indirect trade links. • we have also identified three important domestic risks. bis central bankers ’ speeches • first, there is a possibility that, for a given projection for global growth, exports could be even weaker than assumed. this is a risk that could materialize if competitiveness challenges were greater than anticipated and would result in an even larger loss of market share. • second, there is a risk on the upside that, as confidence returns, domestic momentum builds faster than expected. once the recovery in foreign demand becomes more solidly entrenched, and with domestic demand continuing to grow at a moderate pace, business sentiment could improve rapidly. • the third important domestic risk remains a disorderly unwinding of household sector imbalances, which are still elevated. the continued slowing in household credit and the rise in mortgage interest rates point to a gradual unwinding of household imbalances, but recent data suggest some risk of renewed momentum in the housing market. • although the bank considers the risks around its projected inflation path to be balanced, the fact that inflation has been persistently below target means that downside risks to inflation assume increasing importance. however, the bank must also take into consideration the risk of exacerbating already - elevated household imbalances. • weighing these considerations, the bank judges that the substantial monetary policy stimulus currently in place remains appropriate and today decided to maintain the target for the overnight rate at 1 per cent. with that, tiff and i would be pleased to take your questions. bis central bankers ’ speeches

elected government and the bank are agreed on our policy goal, while giving the bank the operational independence to pursue that goal. this independence is crucial, both in normal times and in crisis times. through this pandemic, the bank of canada, the government, and financial crown corporations and agencies have all been working cooperatively to stabilize the financial system, keep credit flowing and support the economy. the bank ’ s policy actions are designed to complement the government ’ s fiscal efforts. at the same time, we are cognizant of each others ’ mandates, and the government has made it clear that it fully respects our independence. as governor, i will protect the bank ’ s ability to act independently, consistent with our mandate, because that independence is critical to the confidence that canadians place in us, the credibility of our inflation target, and our capacity to achieve it. under our policy framework, our mandate is to provide low, stable and predictable inflation. that ’ s the best contribution we can make to the country ’ s economic and financial welfare. achieving our inflation goals lays the foundation for sustainable economic growth. and keeping inflation close to its target means the economy is running close to capacity with full employment. our inflation target takes on added importance during times of crisis. as the bank moves into uncharted waters using tools it has not deployed before, the inflation target remains our beacon. our monetary policy actions are anchored in the goal of bringing inflation back to target by helping the economy return to its potential capacity with full employment. covid 19 and the measures to contain it represent an economic shock of unprecedented size and scope to our economy. by april, more than 3 million canadians lost their jobs and another 3. 4 million were working fewer than half of their regular hours. with containment measures starting to be lifted in some parts of the country, we saw a resumption of job growth at a national level in may. we expect this to accelerate as the economy continues to reopen, but we have a long way to go, and not all the jobs that were lost are coming back. important fiscal efforts are keeping as many canadians as possible attached to their jobs and helping households and companies make it through the crisis. these efforts are supporting canadians now and will position the economy for recovery. in our latest interest rate announcement, we said that we expect economic growth to resume in the third quarter. and with market function improved and containment restrictions easing, the bank ’ s focus will shift to supporting the resump