Bank of Canada senior deputy governor Carolyn Rogers is warning interest rates might not return to the low levels people were used to before COVID-19 pandemic.
Rogers is delivering a speech in Vancouver today, where she touches on reasons the world may be heading toward higher interest rates in the long run.
According to her prepared remarks, the senior deputy governor says structural changes to the global economy, higher levels of government debt and geopolitical risks could keep interest rates high.
Rogers says the world is already adjusting to the reality of higher interest rates, leaving little “wiggle room” for the global financial system if it were to face a shock.
She says adjusting to higher rates in the long term would be a big change for everyone from governments to businesses to households after 15 years of lower rates, but doing so gradually and proactively lowers the risk of destabilizing the financial system.
She notes that data shows Canadians are adjusting to higher interest rates right now by curbing both their spending and demand for credit.
This report by The Canadian Press was first published Nov. 9, 2023.