More off the wall comments today from Bank of Canada Governor Stephen Poloz. The text for a speech Poloz is scheduled to deliver in Charlottetown, PEI suggests that the Bank continues to make it up as it goes along. Leaving aside the platitudes -- "I must underscore how uncertain the outlook is"; "Recent events make it clear that we live in an uncertain world" -- it seems that Poloz is trying his best to hedge, if not actually row back from, just about every comment he has made on the economy since the start of this year.
Recall that back in January the Bank stunned markets by cutting interest rates, while Gov. Poloz alighted on the term "atrocious" to describe the near term outlook for the economy. Well, I'm not sure what your idea of the near term is, but here we are just four months on, and Gov Poloz is suggesting that in fact the recent economic data -- for non-oil exports, tourism and employment -- have been "encouraging". The "atrocious" period, it seems, was really very short indeed.
But perhaps we shouldn't be surprised by this; after all, just last month, when the Bank kept interest rates on hold, Poloz appeared to suggest that the worst of the impact of low energy prices was already behind us. Or is it? In today's speech, the Governor warns that there's still a risk that lower oil prices could have a larger-than-expected impact on the economy. Or not: the Bank expects the Canadian economy to return to full capacity by the end of 2016, which seems completely inconsistent with the very slow growth forecasts emanating from the Bank of Canada and just about everyone else.
Confused yet? I know I am --but not, I fear, as much as the man tasked with setting Canada's monetary policy.
No comments:
Post a Comment