Poloz and Wilkins take questions
- I don't think there is a disconnect with markets
- Markets understand data dependence
This is the most-ridiculous statement a BOC governor has made. The market was at 58% two weeks ago on a hike because all the recent data has been poor. Then Poloz went out and brushed off the poor data and said it didn't change the picture. The only reason this hike was priced in was because Poloz tipped the market after whipping it around. There is a massive disconnect between Poloz and markets.
More:
- Don't know if the end-game is an economy with a bit of stimulus
- Our confidence in the outlook is growing but we still don't quite understand the impact of interest rates. In latest forecast it's larger
- We're still unsure on how much investment will take place to improve capacity
- Monetary policy
- It's evident to us that higher interest rates will be needed but it's not evident how much higher or how quickly
That final comment is telling and it' self-explanatory. You have to price in some kind of path for Canadian rates but you can't do it with any confidence.
- NAFTA uncertainty has weighed on business investment
- Wilkins: Our forecasts with regards to growth a 'very prudent'
- None of our monetary policy is in response to Fed
- I don't think the signal from the yield curve is the same as more-traditional times
The comment from Wilkins suggests they expect better growth than what they're forecasting.
