Below are some key quotes from a news conference by Bank of Canada Governor Stephen Poloz and Senior Deputy Governor Carolyn Wilkins on Wednesday after the central bank held interest rates steady.
POLOZ ON COMPLEXITY OF TRADE SHOCK THAT MARKETS ARE MISSING
"My sense is that the markets are not really on to the complexity of it. It seems a little too easy that interest rates could decline and that would make everything ok. It may be true for the small shocks that we've had so far but I think it would not hold in a more complex scenario where there's an escalation."
POLOZ ON RISKS TO POLICY ADJUSTMENT
"All our regular risks are counted in there in a balanced way, but to get right to the root of your question, yes, if we had faced risks and we believed they were unbalanced, the forecast would tilt differently. That would influence our thinking around where inflation is likely to be, and that would be grounds for discussion around whether it was time to adjust policy."
POLOZ ON ECONOMIC "HEADWINDS"
"Until those headwinds show signs of dissipating - I don't have to list those, we all know what many of them are - so until such time as those headwinds worsen or dissipate, then we are content with today's setting of interest rates."
WILKINS ON TRADE TENSIONS
"I think we both agree that trade tensions, either escalation or just bigger impacts from uncertainty, present a downside risk to growth. I think that's part of the reason why we need to be particularly focused on the data ... it's not something you observe directly, you see it in the data when you get it, and that means that we need to adjust our forecast."
POLOZ ON POSSIBILITY OF A PRECAUTIONARY CUT
"I want to be sure that you understand I'm not commenting on the American situation or their monetary policy because that's out of school. But you know, we identify risks all the time, and if we identify risks that on balance are forecast, then our forecast gets tilted. So the forecast we present to you today is balanced."
POLOZ ON CANADIAN DOLLAR
"We always take account of the Canadian dollar as a prime ingredient in our forecast. Mechanically, as the dollar rises, of course that reduces our cost competitiveness in international markets and it can slow down our export projection."
POLOZ ON OTHER CENTRAL BANKS
"Central banks all make their own policies based on their own situations."
POLOZ ON LOWER BOND YIELDS:
"Over the past few months we have had a significant decline in bond yields around the world and that of course, as usual, has been transmitted into our bond markets at the same time and this in turn has been transmitted into many of our borrowing rates, such as mortgage rates."
POLOZ ON MORTGAGE RENEWALS
"It's relevant to note that today, people that are renewing five year old mortgages are renewing at the same rates that they saw five years ago, so there is no effect on their cash flow."
Comments
Comments are closed.