(Vancouver) Bank of Canada Senior Deputy Governor Carolyn Rogers warned Thursday that interest rates may not return to the low levels people were accustomed to before the COVID-19 pandemic.
Ms. Rogers delivered a speech to the Advocis Vancouver group on Thursday, in which she discussed why the world could be heading toward higher interest rates in the long term.
In the prepared text of her remarks, Ms. Rogers noted that structural changes in the global economy, higher levels of public debt and geopolitical risks could force interest rates to remain high.
Rogers stressed that the world was already adjusting to the reality of higher interest rates, leaving little “wiggle room” for the global financial system should it face a shock.
She said adjusting to higher rates over the long term would be a big change for everyone from governments to businesses to households after 15 years of low rates, but doing so gradually and proactively reduces the risk of destabilization of the financial system.
Rogers noted that data showed Canadians are currently adapting to higher interest rates by reducing both their spending and their demand for credit.
