Bank of Canada Governor Tiff Macklem said on Friday that they were concerned because they were not really seeing a downward momentum in inflation, per Reuters.

Key quotes

"Bank of Canada is not expecting a recession in Canada."

"When bank releases economic projections on October 25, we're not going to be forecasting a serious recession."

"When Governing Council next meets, it will focus on whether to stick with its 5% rate or if more action is needed to restore price stability."

"Higher long-term bond yields are not a substitute for doing what needs to be done to get inflation back down to our target."

"We are seeing clear signs monetary policy is working to rebalance supply and demand but inflation is still too high."

"We will continue to face geopolitical shocks; in this environment, we need to be prepared for ongoing volatility."

"This is adding uncertainty; monetary policy can influence demand to relieve inflationary pressures, but supply is harder to predict."

"Strength of Canadian economy means people are getting wage increases that will help make it easier to digest impact of higher mortgage rates after renewal."

"Longer run inflation expectations remain well anchored; shorter run expectations have come down but they are still too high