Poloz says he is most worried about under-performing inflation. Highs of the day for USD/CAD at 1.0767.

  • Bank of Canada should hot rates where they are until data flow changes the BOC’s mind
  • BOC keeping rates on hold is result of its trying to minimize the risk of making a big mistake

When you listen to Poloz speak, he sounds like a central banker who is “trying to minimize the risk of making a big mistake” rather than someone who has confidence in where he can lead the economy.

Update:

  • Exports seem to be firming and US economy looking a bit better
  • Signs for US and Canadian economies seem positive but question marks remain
  • Tapering could push up long rates but ‘most of it seems to be priced in’

The comments were from an interview with the CBC, which will air later today.

“I would say I’m most worried about inflation and how it’s underperforming. It’s a difficult one to explain right now; that always makes you worry,” he said.