Still waiting to hear what Stephen Poloz really thinks

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Stephen Poloz is preaching patience. Which is a good thing, because his first speech to the Canadian public as Bank of Canada boss has left us still waiting to hear most of the things we need to know.

Mr. Poloz's speech to the Oakville Chamber of Commerce, and subsequent press conference, deftly ducked anything that would hint at his thoughts on the central bank's existing monetary policy. We heard about the policy framework, the process, the sanctity of the bank's legislatively mandated 2 per cent inflation target. We hear plenty about the slow process of companies investing again, the unusual depth of the financial crisis and recession that has kept the brakes on for so long, the persistent lack of business confidence, and the need for more patience for monetary policy to do its job and restore growth, confidence and investment. We're on the right track. "Stay tuned," he said, more than once.

It was a different voice, but not a substantially different message from what his predecessor, Mark Carney, had been delivering. But what does it all mean for specific policy direction? Well, for that we're just going to have to cool our heels and wait a while.

(At least he cleared the air on how we should pronounce his last name. "It's five letters and it's amazing [how many different ways it can be mispronounced], eh? It's POH-lawz.")

Not quite the revelatory address that at least some observers had pinned their hopes on after waiting seven weeks (since Mr. Poloz's appointment was announced) for the new central bank boss to take to the pulpit and share his wisdom. Maybe five years of the congenitally talkative Mr. Carney had spoiled us. Maybe Mr. Poloz's own personal charm and easy smile had us thinking he would be more forthcoming.

Still, it's all we could have expected. The man is less than three weeks on the job; more to the point, there's a formalized process the Bank of Canada goes through before reaching its eight-times-annually monetary policy decisions, and the process for the next decision (scheduled for July 17, along with the next Monetary Policy Report) is only just beginning now. Indeed, it's a process that Mr. Poloz has never personally participated in; this part of the job is all new to him. He's a smart enough man not to trip himself up in press conference before he even gets started. (If he weren't, we'd have to wonder whether they'd picked the right guy for the job after all.)

The Bank of Canada actually outlines the monetary-policy-making process in some detail on its website. It begins with the Bank of Canada's economic staff formulating their latest base-case economic projections, which they present to the governing council (the governor and his five deputy governors) typically two to three weeks before the policy announcement date. (We're still four weeks away from the announcement.)

About a week before the announcement date, the staff hold a "major briefing" with the council, which outlines risks to the forecast and provides updates on regional surveys, the latest economic indicators, the state of the credit market and expectations of financial markets. There is a final briefing with economists and senior advisers, typically the Friday before the rate announcement, from which come final recommendations on the policy decision. It typically isn't until the day before the rate announcement that the council reaches its final decision and hammers out the wording of the announcement with the bank's communications staff.

That means that while Mr. Poloz certainly has some thoughts about Canada's monetary policy direction, he hasn't had a chance to flesh those out with the input of his council (all of whom have more experience in this process than he does) nor heard the expertise of his advisers and economists. He's still weeks away from actually having concrete answers to some of the questions he was asked Wednesday.

So, circle July 17 on your calendar. That's when Stephen Poloz really starts talking to the Canadian public.