1-on-1 with Stephen Poloz: Part I

Here's a man who knows inflation and interest rates, like no one else.

If you want to understand when the Bank of Canada might ease monetary policy, former BoC Governor Stephen Poloz is one of only a handful of people who's truly in a position of authority on the topic. He's a student of behavioural psychology and he uses that understanding to anticipate Canada's economic path.

We were lucky enough to spend an hour with him last week (but could've listened to him for 8 hours). What follows is part I of our chat, which covers:

  • Whether mortgagors should form an opinion on BoC policy
  • Why real interest rates matter
  • The BoC's information advantage
  • Which forecasters are most inaccurate
  • How much weight he puts on bond market indicators
  • What would take inflation to new highs
  • Why borrowers need rate "insurance"
  • When inflation expectations might come down
  • How long it could take for inflation and rates to drop materially
  • How much faith we should put in the BoC's forward guidance.

Below is that interview and the transcript:

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