June 7 (Reuters) - Below are some key quotes from an appearance on Thursday by Bank of Canada Governor Stephen Poloz and Senior Deputy Governor Carolyn Wilkins in Ottawa, after the release of the semi-annual Financial System Review.
“Trade risk is our number one risk in the context of the monetary policy frame(work).”
“In the MPR of April that (trade) was the top risk and nothing has happened since then to make it less important or less risky. On the contrary it feels even a little more risky today.”
“It (macro backdrop) has steadily improved since our last FSR. Indeed, as we said just a week ago, that governing council’s confidence around the outlook, has, given the data flow, continued to improve at the margin through time; confidence in our narrative, confidence in inflation, confidence in our understanding of how wages are behaving etc.”
“I wouldn’t take that we’re moving to once a year for the financial system review, the full review, as a sign about any view on the vulnerabilities. .. It’s an attempt to be more modern, more accessible, more timely in our analysis.”
“The fundamentals of demand and supply are still very strong in the Toronto and Vancouver markets in particular but not only there.”
“We incorporate all government policy announcements that we’re able to into our forecasts. That will be a job for the July MPR, to address the specific tariff changes.”
“The consumer, we’re confident, will end up paying more for many things. That has an impact directly on inflation measures and it also has a direct impact on real spending power.
“Reducing trade is a negative sum game. Everybody loses, in some way or another.”
“What we have observed is that the growth slowing is particularly strong in the singles market as opposed to condos ... part of that has to do with affordability.”
WILKINS ON BOC’S EXPECTATION FOR HOUSING MARKET TO STABILIZE
“We do expect the housing market to stabilize. It may take a little bit longer than we thought in April. But the fundamentals that are there, in terms of a strong labour market in those regions (Greater Toronto Area and Greater Vancouver Area) as well as the supply constraints, just on the amount of housing, they are still in place. (Reporting by Fergal Smith and Matt Scuffham and Nichola Saminather Compiled by Denny Thomas)