His response in summary: The large increase in inflation started largely as a result of global factors such as Russia's invasion of Ukraine and supply chain slowdowns due to the Covid pandemic. As the economy reopened after the pandemic, demand for goods and services from consumers in Canada and around the world grew quickly but companies around the world could not keep up with that sudden growth in demand. This caused prices to increase and further inflation.

The Bank of Canada has responded by increasing interest rates - this has caused demand for goods and services to slow, and is allowing supply to catch up with demand. This is why inflation has been reduced from its high of 8% to today's rate of 3.4% . The Bank of Canada will lower rates when inflation is approaching the target of 2%.

 

You can watch my full exchange with the Governor Tiff Macklem below.