Governor of the Bank of Canada, Tiff Macklem, said Wednesday that citizens' trust in the Bank of Canada has been affected by post-pandemic inflation and needs to be rebuilt.

He added during a discussion at the Montreal 2024 forum, "For many of our citizens, this was their first experience with rising inflation, and it was painful."

He explained, "Inflation hurts people and the economy, and it erodes trust in our market-based system."

Macklem also mentioned that the Bank of Canada needs to find ways to explain its policies to a wide range of audiences, including families trying to navigate uncertain times.

He continued, "We need to meet people where they are and ensure they understand what we are doing and why we are doing it."

He added that recent history has served as a stark reminder "that inflation is our common enemy."

Last week, the central bank announced a quarter-point reduction in the key interest rate, the first since a sharp rate hike cycle began in March 2022 in an effort to curb inflation.

Since then, the economy and inflation have slowed, giving the central bank enough confidence to begin cutting interest rates.

Macklem also said it is reasonable to expect further cuts.

The Federal Reserve kept the interest rate steady, as the Canadian economy weakened more quickly under the strain of rising interest rates, and Macklem acknowledged the difference between the two central banks' policies, but he said this is not a cause for concern at this time.

Macklem emphasized that businesses and central banks need to prepare for increased volatility in supply chains amid climate change, geopolitical tensions, and technological change.

He added, "But the challenges of the future are rarely similar to the challenges of the past."

He noted that despite the decline in interest rates in some economies, it is unlikely that interest rates will return to pre-pandemic levels, emphasizing: "The new normal will not be the old normal."