Canadian dollar down on the comment
- Our new forecasts imply a permanent shortfall in exports
- Our July export estimates only assumed growth in line with growth in US economy but it's still fallen short
- Poloz suggests there is something going on in exports that the BOC doesn't understand
"Given the downgrade to our outlook, Governing Council actively discussed the possibility of adding more monetary stimulus at this time, in order to speed up the return of the economy to full capacity," he said. "However, we identified a number of significant uncertainties in the current context that are serving to widen the zone of balance within our risk-management framework. These include: the macroeconomic effects of the new mortgage rules; the likely path of our exports; the impacts of the federal government's fiscal measures, which are just beginning to be felt; and the effects on business confidence of the US election."
This is far more dovish than the BOC statement and suggests a rate cut is definitely on the table.