It took just one sentence for the Bank of Canada’s monetary policy report to stun David Rosenberg.

“I actually had to pick myself off the floor when I read the first sentence, that the global economic outlook is solid,” the Gluskin Sheff + Associates chief economist told BNN Bloomberg in an interview on Wednesday, reacting to the Bank of Canada’s decision to raise its benchmark interest rates 0.25 points to 1.75 per cent. “I’m thinking: ‘Wow.’ The OECD leading indicator is a leading indicator. That’s the outlook. It’s down nine months in a row to its lowest level since Dec. 2016, and they’re telling us the outlook is solid?”

The Bank of Canada said the economy is growing  faster than predicted and that uncertainty over trade and investment that plagued Canada during the NAFTA renegotiations should be mitigated by the new USMCA trade deal.

Bank of Canada Governor Stephen Poloz added in his comments on Wednesday that the domestic economy no longer needs to be sheltered by stimulus.



“The economy is running at its capacity and it is no longer needing stimulus and so it’s our job to prevent the thing from overheating,” Poloz told reporters at a press conference.

Rosenberg thinks that Poloz’s optimism, alongside Finance Minister Bill Morneau’s comments to BNN Bloomberg on Wednesday that he remains confident on Canada’s business outlook amounts to politicking and a lowering of the economic bar for success.

“If I was a politician the economy would be strong every moment of every hour of every day,” Rosenberg said. “The year-over-year growth in real GDP in Canada is 1.9 per cent. So I guess if that’s robust, we have to come up with a new definition [of it]. I guess two is the new four.” 

This is not the first time Rosenberg has stood at odds with the central bank.

“I don’t really completely understand why it would be the Bank of Canada – of all central banks – that would be following the [U.S.] Fed in raising rates,” Rosenberg told BNN Bloomberg on July 11, following the bank’s move to a 1.50 per cent benchmark rate.

While he understands the bank’s decision to move higher on interest rates, he stressed that the central bank’s expressed intention to no longer take a gradual approach to future hikes.

“I can see why the bank raised rates today. That’s fine. It was baked in the cake,” Rosenberg said.

“But to be so open-ended and, in my opinion to be so strident... I would not have decided to take the word ‘gradual’ out at this meeting.”