Poloz is tired of forward guidance, wants markets to be uncertain

Author: Adam Button | Category: Central Banks

Bank of Canada Governor spoke to the Globe & Mail

An interview with BOC Governor Poloz was published on the weekend in the Globe & Mail. The comments indicate he's not going to pre-warn markets ahead of the next rate hike.

He wants to set an example.

"I'm confident that other central banks, now that we are getting much more into normalcy, will gradually temper down the details around their forward guidance, too."

At the moment, the note about 'caution' in the BOC's statement has led markets to believe he won't hike until it's removed.

"I'm not going to judge whether the market got it right or not. But it does seem like the market has a tendency to seize on a new word as if it's a new secret code," he says.

"Caution does not mean sitting back and doing nothing," he said.

Poloz topped it off with somewhat of an urgent call to get interest rates to 2%.

"We need to get ourselves up there for real, and to the 2-per-cent zone, so we have room to manoeuvre for the next shock that comes along."

Another development is that starting in 2018, Poloz or a deputy will be tapped to deliver a speech after the BOC meeting, in order to clarify the central bank's thinking.

By continuing to browse our site you agree to our use of cookies, revised Privacy Notice and Terms of Service. More information about cookies