June 27 (Reuters) - Below are some key quotes from Bank of Canada Governor Stephen Poloz in Victoria, British Columbia on Wednesday, where he said the effects of U.S. steel and aluminum tariffs and tighter mortgage rules will “figure prominently” in the Bank of Canada’s July decision on interest rates.
“The trade tensions have clearly raised a level of uncertainty among companies who depend on trade for their business and so now that we have concrete tariffs on steel and aluminum, it’s clear we’re dealing with something real as opposed to just the possibility that NAFTA might someday not exist. That’s a big difference. So as I said, we’re incorporating those things directly. This uncertainty means that anybody who needs or relies on NAFTA in their day-to-day business would hesitate to make a new investment or expand their business under those conditions.”
“As forecasters, we’ll deal with what’s real, what’s been actually concretely announced and fold that in, and the rest is basically speculation at this stage and we won’t engage in it. And we certainly won’t make monetary policy on the basis of it.”
“The various (housing) policies, I wouldn’t point to any individual one, but a lot of things changed at once, from a federal point of view it was primarily about mortgage qualifications and insurance rules, those changes have certainly taken some of that speculation out of the market and some prices actually went down.”
“The economy probably would slow but inflation is more likely to rise.”
“I read the odds of an interest rate hike the same way I think you do by looking to see what’s going on in the market.”
“The market looks at all the data just as we do and those odds are there for everybody to see.”
“It takes 100s of data points to make a view over the course of a quarter. And some of them are higher weights than others, such as the national accounts data which give us the most complete picture of the economy.
“It might be worth reminding you that data point for the first quarter, was exactly, to the decimal point, exactly what we forecast in the April MPR (Monetary Policy Report), which is quite reassuring in the sense that underlying appears to be correct. And inflation is exactly on target as we expected.”
“The little picture is the bumps and wiggles in day-to-day data points, which are always there, lots of volatility. We don’t set monetary policy on the basis of those single data points.”
“The economy is operating very close to its capacity and inflation is on target so we’re, more or less, at what I’ve described as home.”
“Given where the economy is we are in a situation where the economy will warrant higher interest rates. We will ensure that is a gradual process.”
“Having the occasional data point that didn’t fit market expectations is not the sort of thing that throws that entire narrative off course. We are data dependent, not headline dependent.” (Reporting by Fergal Smith, Matt Scuffham and Danya Hajjaji Compiled by Denny Thomas)