It continues to provide important accommodation in an environment of increased downside risks to growth and thereby supports the sustained convergence of inflation to levels closer to 2%. Since our decision to halt net purchases, further employment gains, increasing wages and the underlying strength of domestic demand continue to confirm the Governing Council’s central outlook of gradually rising inflation.
In this context, we cut policy interest rates to support aggregate demand and thus return inflation to 2 per cent over the medium term. In Canada, economic growth in the period ahead will need to come primarily from private domestic demand, supported by monetary stimulus and by strong business confidence.