Bank of Canada press conference, Jan 18 2017
- US policy is unknown and difficult to forecast
- We've made some reasonable initial assumptions about US personal and corporate tax cuts
- Expect US tax cuts to add 0.5 pp to GDP by end of 2018, will boost Canada by 0.1 pp by 2018
- Higher US bond yields are crossing border into Canada, will hurt Canada
- Higher interest rates will act as a drag on Canadian economy; and are at odds with Canadian macro situation
- The higher Canadian dollar will create a drag on exporters
- Latest economic data doesn't support above-potential growth alone; fiscal stimulus is still the main driver
- Highlights of the statement and MPC
- Full text of the statement
The takeaway is that they're not happy with some of financial developments that have already taken place and that they're worried about changes to trade policy.
