When Stephen Poloz was a teenage disc jockey, he would deploy a stimulus measure that was sure to get his elders out of their seats and onto the dance floor: “Raindrops Keep Falling on My Head,” the Burt Bacharach and Hal David tune that was a No. 1 hit for B.J. Thomas in 1970. “Something familiar and mid-tempo,” Mr. Poloz told me in 2013 when I interviewed him for a profile in Report on Business magazine; that was how you pulled the wallflowers off the sidelines at the Whitby Curling Club in the 1970s, he said.
Mr. Poloz’s 2015 playlist so far is missing that familiar tune that gets everyone humming and tapping their feet. The January rate cut surprised everyone. Some people liked it, others not so much. Mr. Poloz then jolted his audience again in March, this time be leaving the benchmark rate unchanged at 0.75 per cent. Most observers had decided that a second rate cut would be necessary to stave off whatever disaster prompted the January move. “It seemed to come out of the clear blue sky. That was not helpful,” Douglas Porter, chief economist at Bank of Montreal, told the Globe and Mail. “It gave the sense that there was something fundamentally wrong with the economy. It’s a blow to confidence.”
Continue reading (paywall) ...