Andrew Kelvin, Senior Canada Rates Strategist at TD Securities, notes that the BoC Governor Poloz made an explicit argument for lifting rates gradually at Jackson Hole over the weekend.
Key Quotes
“The crux of his argument was that the impact of digital technologies on productivity was not fully understood, and that policy makers may be underestimating potential GDP. To account for the risk, he argued that central banks ought to lift rates more gradually than they otherwise would.”
“This was the Governor’s last public appearance before the BoC enters blackout this week. Poloz’s advocacy for a gradual pace of tightening suggests that the Bank will be content to leave rates unchanged next month, despite stronger than expected readings on the economy. We continue to look for the next rate hike in October.”
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