Similar line from Poloz, different take in the market
- Reiterates that Canada still requires stimulus
- View of economy 'quite good, even with the shadow cast by household debt'
- "Ultimately, the Bank's job is to look at the economy as a whole and judge the outlook for inflation. Today, the view is quite good, even with the shadow cast by household debt."
- Debt makes economy more sensitive to higher rates
- Reiterates that BOC will be cautious in making future rate moves and guided by data
- Full text
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The market is treating this like it's something new. These are all the same comments Poloz has been making over the past two weeks.
At the BOC press conference, Poloz said they had "renewed confidence that we're on the right narrative" and that "the economy is in a good place."
Here's an interesting passage:
"With supply and demand in our economy currently close to being balanced, you might expect our policy rate to be much closer to neutral. But several forces appear to be still acting to restrain the economy. We talked about these in the MPR. They include the new mortgage rules, ongoing uncertainty about US trade policy and the renegotiation of the North American Free Trade Agreement, and a range of competitiveness challenges affecting Canadian exporters. These forces will not last forever. As they fade, the need for continued monetary stimulus will also diminish and interest rates will naturally move higher," he said.
