Ying expressed concern that time is limited, especially given that August inflation was at the target rate of 2 percent but would be lower at around 1.3 percent without mortgage interest costs.
The recent adjustment in the Consumer Price Index (CPI) weights indicates that mortgage costs now significantly influence inflation measures, suggesting potential downside risks if rates decrease more rapidly than expected.
Economic data shows mixed signals. Retail sales rose 0.9 percent in July, surpassing estimates, with Statistics Canada forecasting a further increase of 0.5 percent for August.
This suggests a stronger third quarter gross domestic product (GDP) than previously expected, despite indications of stalling growth in June and July. Ying cautioned against overestimating this growth, noting that retail sales on a per-capita basis declined 1.3 percent in real terms over the past year.
The Bank of Canada recognizes the impact of population growth on economic data. In its latest Monetary Policy Report, it forecasts third-quarter GDP growth of 2.8 percent, factoring in a 3 percent population increase.