Poloz "Unsure" on Prospect of More Rate Hikes
Bank of Canada governor Stephen Poloz told reporters Thursday he doesn't know the potential for the country's central bank to hike interest rates again this year.
"That's a question even I don't know the answer to," Poloz said during the World Economic Forum in Davos, Switzerland.
Last week, the Bank of Canada bumped the target for the overnight lending rate to 1.25% from 1% — the third time it has moved its benchmark rate from once-record lows last summer.
The bank also bumped up its expectations for how the economy will perform this year and in 2019. The bank now expects Canada's economy to expand by 2.2% this year and 1.6% next year. Previously the bank was anticipating 2.1% and 1.5% growth.
Despite the mainly positive stance on the economy's prospects, the bank cited "uncertainty about the future of (the North American Free Trade Agreement" as a reason for concern.
In his Davos talk, Poloz agreed that the central bank was "NAFTA-dependent," but added that it isn't possible to predict the bank's response if the trade deal is terminated or significantly changed.
"If the economy began to slow as a result, then we'd be able to put those pieces together, then it would go into the mix, the inflation target would be at risk, and we'd be cutting rates into that. But a lot of things could move at the time," Poloz said.