Is the Bank of Canada Running Out of Arguments?

Concerned about signs of fragility in the Canadian economy, and especially the U.S. protectionist threat, the Bank of Canada (BoC) has taken a particularly cautious tone since the fall. Governor Stephen Poloz has even, on a number of occasions, suggested that a rate cut should not be ruled out. However, on either economic growth, inflation, labour market or housing dynamics, economic indicators have surpassed expectations and quite persistently. This Economic Viewpoint looks into whether a change of tone is on the horizon for the BoC. In our opinion, it may be that it recognizes some improvement in the outlook, but it still has good reasons to be cautious.