Bank of Canada governor’s communication approach under scrutiny

OTTAWA — The central bank governor’s communications style is under a microscope, but the jury’s still out on whether he needs to change his strategy.

Experts shared a range of views Thursday at a Bank of Canada conference about governor Stephen Poloz’s messaging ahead of his interest-rate decisions, which included a hike last week that caught some analysts by surprise.

The rate decision attracted open criticism from forecasters over the fact the bank didn’t offer more-explicit signals about its intentions beforehand.

Others, however, have dismissed the concerns. They’ve argued that stronger-thanexpected economic numbers released before the rate increase provided more than enough information to persuade markets that, despite the bank’s silence, a hike was on the way.

The debate over central bank communications emerged as a central theme at the Bank of Canada headquarters, where dozens of the country’s top economic experts gathered for a conference on monetary policy. Attendees offered different opinions as well as some advice on the issue.

Some suggested the bank offer a consistent level of public transparency regarding its expected interest-rate path.

But other experts said there was no need for the bank to give more signals to markets, which economists often refer to as “forward guidance.” The issue made headlines in recent days after BMO chief economist Doug Porter wrote a paper to clients calling the central bank’s pre-decision communications an “epic” failure.