A senior Bank of Canada official cautioned it is likely that longer-term real interest rates will remain elevated relative to prepandemic levels and will be higher than Canadians are used to in the coming years. Speaking a day after the central bank resumed lifting its policy rate amid still-high inflation and a resilient economy, Deputy Gov. Paul Beaudry on Thursday said there remains uncertainty but risks to long-term real rates are tilted to the upside. The bank’s most recent analysis suggests Canada’s neutral rate hasn’t drifted much from its prepandemic range, with short-term rates expected to settle at roughly 0% to 1% in real terms over time.
Read More : Bank of Canada’s Beaudry Identifies Indications of a New Era with Elevated Interest Rates