Thank you, Chair.

We're very pleased that Canadians are feeling some relief.

We're very pleased to be here at the committee to discuss our recent policy announcement as well as our new outlook in our monetary policy report last week.

As you highlighted, last week we lowered our policy interest rate by 50 basis points. It was our fourth consecutive interest rate cut since June, and it brings the policy rate to 3.75%. We took a bigger step because inflation is now back to the 2% target, and we want to keep it close to the target.

In the past few months, inflation has come down significantly. Headline inflation was 1.6% in September, and both our measures of core inflation were under 2.5%. Price pressures are no longer broad-based. Our surveys also find that business and consumer expectations of inflation have shifted down and are nearing normal. All this suggests we're back to low inflation. That is good news for Canadians.

Now our focus is to maintain low and stable inflation. We need to stick the landing. That means the upward and downward forces on inflation need to balance out. Economic activity picked up this year, but it is still soft. This softness has helped to take the remaining steam out of inflation, but with inflation now back at 2%, we want to see growth strengthen. Last week's interest rate decision should contribute to a pickup in demand.

We expect the economy to gradually strengthen in 2025 and 2026, supported by lower interest rates. Population growth will be slower, but we anticipate consumer spending per capita will be picking up. We also expect growth in residential investment to rise as strong demand for housing boosts sales and spending on renovations. The Bank of Canada expects business investment to strengthen as demand picks up. Exports should remain strong, supported by robust demand from the United States. Our forecast has inflation staying around the target over the projection horizon. The upward pressure from housing and other services is expected to gradually diminish. With stronger demand, the downward pressure on inflation should also dissipate. This will keep the upward and downward forces roughly balanced.

There are risks around our inflation outlook. The biggest downside risk to inflation is that it could take longer than anticipated for household spending and business investment to pick up.

On the upside, lower interest rates could fuel a stronger rebound in housing activity, or wage growth could remain high relative to productivity. We are also facing elevated geopolitical uncertainty and the risk of new shocks. Overall, we view the risks around our inflation forecast as reasonably balanced.

If the economy evolves broadly in line with our forecast, we anticipate cutting our policy rate further to support demand and keep inflation on target. The timing and pace of our interest rate cuts will depend on incoming information and our assessment of its implications for the inflation outlook. In other words, we'll continue to take our monetary policy decisions one at a time.

Let me conclude.

As you highlighted at the outset, Chair, high inflation and interest rates have been a heavy burden on Canadians. Now we're coming out the other side. Monetary policy has worked to get inflation down. With inflation back to target and interest rates continuing to come down, families, businesses and communities should feel some relief.

The bank is committed to maintaining price stability for Canadians by keeping inflation close to the 2% target.

With that, the senior deputy governor and I would be very pleased to take your questions.

Thank you very much.