BoC Wilkins: Governing Council will assess if all monetary stimulus is still required

Carolyn Wilkins, Senior Deputy Governor at the Bank of Canada, surprise markets on a quiet session with hawkish comments regarding the future of monetary policy. The Canadian dollar reacted with a strong rally. She spoke at The Associates of the Asper School of Business in Winnipeg. 

Key Quotes: 

“Our judgment on the appropriate stance of monetary policy will continue to be based on the outlook for inflation and on the full range of risks—both upside and downside—to that outlook. An important aspect of our inflation assessment is that the economic drag from lower oil prices is now largely behind us. And the 50 basis point reduction in our policy rate in 2015 has facilitated this adjustment.”

“As growth continues and, ideally, broadens further, Governing Council will be assessing whether all of the considerable monetary policy stimulus presently in place is still required.”

“There are still risks to the Canadian economic outlook. That said, when you look at the economy from different perspectives, there is reason to be encouraged. Growth has been robust in recent quarters.”

“The strengthening economic activity in regions and sectors that rely on energy is working to diversify the sources of growth across the country. And, while there is still room for improvement in the labour market, stronger growth is translating into job gains across a wider range of regions and sectors.”