There is a growing consensus among economists that interest rates have peaked in Canada and we’ll start seeing some relief next year.
Practitioners of the Dark Science watch a host of indicators to formulate their impressions of how the economy is performing, how business and consumers are reacting to changing market conditions and, finally, how central bankers will react to those changes. And they are increasingly coming to the conclusion that the medicine we have been taking for the last year or two is working.
Central bankers moved quickly to raise interest rates – especially in North America – when inflation began to gain momentum. The idea was to increase the cost of money which would slow things down. So, we wouldn’t borrow as much to fuel investment or spending.
And it worked. The economy is losing speed and job markets are tightening.
It also appears central bankers have concluded its time to take their foot off the brake with most observers suggested several rate cuts in the next year knocking a point or a point-and-a-half off the benchmark interest rate levels in 2024.
