In North America, there are currently two very contradicting states between the Central Banks of Canada and the Federal Reserve of the United States. According to a senior central bank official, the Bank of Canada will not respond mechanically to any future move by the U.S. Federal Reserve to raise interest rates. Deputy Governor Timothy Lane spoke to an audience in Waterloo, Ontario and stated that “tighter monetary policy in the U.S. would lead to higher market interest rates globally, producing a tightening effect for Canada.”

This comes after Canada recently voted to not cut interest rates last month. It would have been the third cut since the beginning of last year, but the bank instead opted to leave its benchmark rate at a still low 0.5% due to the uncertainties clouding the bank’s economic outlook. The Central Bank is now closely monitoring the effect of the federal government’s recent move to tighten standards and limit access to mortgage insurance for borrowers that might be considered riskier. Toronto-Dominion economist Brian DePratto believes that not cutting interest rates was the right thing to do. According to DePratto, “An interest rate cut would likely do little to spur exports, while potentially undoing much of the impact of the recent housing market rule changes.” The bank expects the economy to grow to 1.1% this year and 2% in 2017, which is down from its July projections.

Meanwhile in the United States, Federal Reserve Chair Janet Yellen stated that interest rates could rise relatively soon. This statement was among Yellen’s first comments following the election of U.S. President Donald Trump, who is a major critic of Yellen. Yellen’s belief is that the Federal Reserve should be independent from politics, and this separation is critical for the economy’s health. The last time the Fed raised its key interest rate was in December 2015, which was the first time in almost a decade. While some may be worried about the potential interest rate hikes, this is a signal that the U.S. economy is getting healthier, and is able to handle the higher costs of borrowing. Yellen also noted that the job market maintained some momentum this year, wage growth is beginning to improve, and inflation is moving (slowly) in the correct direction. Overall economic growth has also picked up nearly 3% in the third quarter after an average of 1% the first half of the year.

While many are still speculative of the interest rate hike in the U.S., Wall Street investors believe there is an 85% chance of the rate increase occurring in December. However, it is clear that Canada will consider its own economy first before choosing to follow, or not follow, the Federal Reserve’s actions.

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