Canadian economic data over the summer have come in largely in line with our July outlook, and forwardlooking indicators suggest the economy is slowing. However, labour markets remain tight, the economy is in excess demand, and we have yet to see clear evidence that underlying inflation has come down.
When combined with stillelevated near-term inflation expectations, the clear implication is that further interest rate increases are warranted. Simply put, there is more to be done. We will need additional information before we consider moving to a more finely balanced decision-by-decision approach. We know we are still a long way from the 2% target. We know it will take some time to get there.