CIBC Research comments on today’s speech by BoC’s senior deputy governor Wilkins, noticing that markets zero in on her comments regarding the future path of monetary policy.
“The tone of the speech was more hawkish than recent communications by the Bank of Canada…While she subsequently noted that there continue to be indications of spare capacity in the Canadian economy, Wilkins concluded by saying that "Governing Council will be assessing whether all of the considerable monetary policy stimulus presently in place is still required.”
The hawkish nature of the speech is the first acknowledgement from the Bank that the next move is likely to be a hike.
While Govenor Poloz is still likely to take a cautious approach, today’s comments cement our belief that the market had been underpricing the chances of policy tightening early in 2018 or even before that,“ CIBC argues.
Source: CIBC Economics – CIBC Capital Markets
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