BoC Governor Stephen Poloz said in a Maclean’s magazine interview yesterday that the central bank could resume rate hike “some time down the road”. However, the pre-condition is that incoming data would prove the current slowdown is only temporary. BoC kept interest rate unchanged at 1.75% earlier this week and dropped tightening bias in the statement.
For now, Poloz expected that the slowdown would last “a couple of quarters”. He added, “what we have to do then is wait and see if the data proves to us that we were right about that.” And, “assuming we are, then sometime down the road we’ll be able to say: ‘OK, now it’s time to start normalizing again,’ but that remains to be seen.”
On the topic of trade, Poloz also said Trump’s trade policies could “certainly” trigger a new global recession. “When you think about the gains in income and living standards that have been created by trade liberalization in a postwar period, to erase even a portion of those would be to risk causing a recession globally,” Poloz said.
