Here are highlights of Bank of Canada Governor Tiff Macklem's speech Tuesday in Quebec City, Quebec, which largely stuck to the message of a rate pause following a 25bp increase on Jan. 25.

• "We faced an overheated economy and high inflation, and we responded forcefully, increasing our policy interest rate rapidly. The year ahead will be different."
• "We are pausing to assess how well our interest rate increases are working to bring inflation down. With inflation above 6%, we are still a long way from the 2% target. But inflation is turning the corner. Monetary policy is working."
• "After 11 months of policy rate increases, we’re seeing signs that higher interest rates are beginning to rebalance the economy. Household spending has moderated, particularly in interest-rate-sensitive sectors. The labour market remains tight, but early signs of easing are evident."
• "We shouldn’t keep raising rates until inflation is back to 2%. Instead, we need to pause rate hikes before we slow the economy and inflation too much. And that is what we are doing now."
• "We expect economic growth to be close to zero for the next three quarters. With growth in demand stalled, supply will catch up and the economy will move from excess demand to modest excess supply. This will relieve inflationary pressures."
• "Recent developments have reinforced our confidence that inflation is coming down... For inflation to get back to 2%, supply needs to catch up with demand and services price inflation needs to cool. Wage growth will need to moderate alongside inflation expectations, and pricing behaviour normalize. If those things don’t happen, inflation won’t come back to our 2% target, and additional monetary tightening will be required."
• "We view the risks around our inflation forecast as balanced. But with inflation still well above our target, we continue to be more concerned about the upside risks."