Poloz speaking in BOC press conference
- Today's hike validates what we saw in the marketplace
- BOC will remain fully data dependent
- We're closely watching how investment will react to trade agreements
- Data dependence remains the watchword
- Neutral rates are between 2.50% and 3.50%
- By gap to 1.25%, you can gauge how much excess stimulus is in economy
- A number of things are acting on the economy and it will be 'some time' before we get to neutral
- Exports are still in uptrend, but we know exports are well below what models expected
- Flags persistent decline in Canada's competitiveness
- Few expansions have died of old age
- We need to be prepared for any kind of shock
- Confident we can continued to build on 'room' to cut rates later
- Productivity has improved and that suggests more room for wage growth
- IT services and exports are a big source of employment, that can continue
- On balance I'm encouraged by trade
Wilkins:
- There isn't one rate of growth of wages that would make us comfortable
- Consumer prices likely would go up due to the end of NAFTA
USD/CAD has faded down to 1.2448 in the press conference. There's more talk of a 'neutral hike' now than a 'dovish hike'. I haven't seen anything that would preclude another hike in the spring.
