BoC's Poloz: Current level of rates appropriate for the 'time being'
|Below are some of the key highlights from the text of a scheduled speech by the BoC Governor Stephen Poloz at the Chartered Financial Analyst Society Breakfast Seminar in Toronto.
• The pace of increases remains 'decidedly data dependent'.
• Repeats that neutral is 'in the neighbourhood' of 2.50-3.50% (1.75% is the current rate).
• Continues to judge rates need to rise into neutral range.
• Signing USMCA will likely support investment rebound.
• Credit growth and strong demand show housing market is stabilizing.
• WCS discount has narrowed but spreading to light crude.
• Painful adjustment already developing for Western Canada.
• Data released since Oct MPR "have been on the disappointing side".
• The economy has less momentum heading into Q4 than expected.
• Much of BOC's deliberations were focused on oil, prices well below MPR projections and demand could be hit by moderating global growth and trade tensions.
• The main risk to the outlook is trade tensions between the US and other nations, says containing inflation risks would be paramount in an outright trade war.
• Many highly-indebted countries will face difficult adjustment as mortgages reset and rates go up.
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