In somewhat of a surprise move, Finance Minister Jim Flaherty passed over presumptive favourite Senior Deputy Governor Tiff Macklem in naming Stephen Poloz as the new governor of the Bank of Canada.

Mr. Poloz spent 14 years with the Bank of Canada in numerous roles including Chief of the Bank's Research Department before moving on to Export Development Canada (EDC) where he served as the Chief Economist and, since 2011,  as the EDC's CEO and President.

While Mr. Poloz has been outside of monetary policy-making for some time and his views are relatively unknown, we do not expect the Bank's approach to change in a material way in the near future. The Bank will still operate under a flexible inflation targeting regime with a focus on medium-run inflation of 2 per cent and our view remains that interest rates will remain on hold over the next year while the Bank's forward guidance on rates will remain neutral.