The Bank of Canada is not ready to stop increasing interest rates, says its governor.

Tiff Macklem said Friday that it’s too early to curb hikes as the central bank continues its quest to cool demand and return inflation to its 2% target. He made the comments at his end-of-year speech to the Canadian Club in Toronto.

The BoC boss expects inflation declines to be gradual.

“We don’t need to wait until inflation is all the way back to the 2% target to consider easing policy, but it does need to be clearly headed to 2%,” he said.

Macklem’s interest-rate stance differs from that of U.S. Reserve chief Jerome Powell. Earlier this week, Powell said interest rates may have peaked and signalled that the U.S. central bank could be ready to hold the line on further hikes.

“When it’s clear that inflation is on a sustained downward track, we can begin discussing lowering our policy interest rate,” said Macklem. “We have not started having that discussion, because it’s too early to have that discussion.”

The BoC has increased interest rates 10 times since spring 2022.