Bank of Canada likely on hold until well into 2018

Bank of Canada Governor Stephen Poloz’s speech earlier this week was too dismissive of the current weakness of underlying inflation, although that isn’t a surprise given the Bank’s interest rate hikes this year. Nevertheless, the speech did reveal that Poloz now expects to proceed cautiously with any future interest rate moves. This supports our view that the Bank will remain in a wait-and-see mode for the next six months.