- “In theory lower oil prices mean [putting] more money in consumers pockets, but . . . if an oil company cancels [an investment] project, laying off a worker, that guy will not have the money to buy a new pick-up truck. That spreads pretty quickly,” says Bank of Canada Governor Stephen Poloz in an FT interview. “The first quarter of 2015 will look atrocious, because the oil shock is a big deal for us."
- Poloz has already unexpectedly cut interest rates thanks to oil's crash, and he says the bank has many options left, including so-called forward guidance (a pledge to hold rates low for a long time), as well as asset purchases.
- The good news, says Poloz, is the sharp decline in the loonie, and he notes U.S. investment is "starting to fire on all cylinders," and manufacturing is rebounding. "We were losing a lot of the auto parts manufacturing to Mexico. That calculus has shifted."
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