Bank of Canada Poloz speaking at Fireside chat
- It seems potential downside risks of the trade disputes have eased as US China approach a deal
- Fact that many stock markets have been posting record highs suggest markets are taking relatively positive view of prospects for corporate earnings despite uncertainty
- Bank has seen recent improvement in evolution of global trade policy, remains to be seen whether this improvement will lead to recovery and investment
- USMCA trade packets close to ratification, which will remove big sources of uncertainty for many Canadian firms: US/ China have agreed to stop raising tariffs
- Perhaps lesson is never ignore what markets are telling you but keep in mind they are prone to exaggerations
- BOC is watching for signs that adverse impact of trade disputes are being felt beyond directly affected export sectors; most recent data in this regard have been mixed
- Will be watched to see how much of recent moderation in labor market strength persists
- Should housing rebound continue, we will be looking for signs of froth in major housing markets; says fundamental demand for housing appears to be outpacing ability to build new homes
- In period of low rates and flat yield curves we may see more frequent yield curve inversion's that indicate slowdowns rather than recessions
