BoC not trying to ‘frighten’ with rate cut, housing forecast, ‘atrocious’ remark

OTTAWA — The governor of the Bank of Canada says he didn’t mean to surprise markets in recent months with his stunning interest-rate cut, a worrying real estate projection and the grim adjective he chose to describe the country’s economic performance.

During testimony before a parliamentary committee, Stephen Poloz was asked about his eyebrow-raising use of “atrocious” to describe his expectations of the effect the slump in oil prices would have on the economy over the first three months of 2015.

Poloz was also questioned about the central bank’s recent assessment that Canada’s real estate prices could be overvalued by as much as 30 per cent, even though it has stressed the country is not facing a housing bubble.

He maintains the bank had no intention of frightening people in these cases.

Poloz is projecting zero growth for the first quarter of the year, but he expects better days ahead and predicts future data releases to show the economy accelerating as early as this spring.

The governor was responding to questioning by House of Commons finance committee chair James Rajotte, who asked whether the central bank was tying to shock markets on purpose.

The Canadian Press

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