The
Bank of Canada sent signals earlier this month that the Canadian
economy is very much on its own path and, at least in the short term,
has no reason to follow any move by the Fed to lower rates.
“The
fact that Canada is picking up while the U.S. economy is slowing sounds
like a divergence. In fact, it’s a process of convergence,” said
Wilkins, noting Canada’s interest rate was already lower than the Fed’s.
“The
United States is slowing to a more sustainable pace, while Canada is
moving back up to its trend growth… By the second half of this year,
growth should be similar in both economies as they converge on their
respective potential level of activity.
