Stephen S. Poloz, the Governor of the Bank of Canada, is now delivering his prepared speech titled ‘Let Me Be Clear: From Transparency to Trust and Understanding’ at Greater Victoria Chamber Of Commerce, with key highlights, via Reuters, found below.
- Impact of tariffs, B20 lending guidelines to “figure prominently” in July rate decision.
- Bank is working to incorporate effects of steel and aluminum tariffs, retaliatory measures, into projections.
- Bank is analyzing data to understand how new lending guidelines are affecting housing market, mortgage renewals.
- That is why we say that the bank is particularly data-dependent right now.
- These days there is a litany of things we simply do not know.
- Degree to which trade uncertainty is holding back business investment is unclear.
- Uncertain how sensitive the economy is to higher rates given accumulated household debt.
- Providing routine forward guidance would not enhance bank’s credibility, rather it would put it at risk.
- Financial markets understood bank’s message at the end of May.
- May shift in language represented increased confidence that economy was performing as expected, higher rates warranted.
- Seen signs that markets have become more responsive to data surprises, market signaling now stronger.
- Cannot mechanically follow the rate path provided by models because too much uncertainty.
- Market signals have “never been more valuable” to policy-makers given complex uncertainties we face today.
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