It may sound a bit ironic, but we should always bear in mind that, although one of the causes of the current financial crisis was the further strengthening of interconnectedness among economies due to the rapid progress made in globalization, the process of overcoming this crisis will in its consequences also further strengthen globalization.
It is important to note that the economic setting for such an interest rate move also needs to be taken into account: the Fed’s rate move would likely be made in response to a strengthening US economy, which is itself typically favourable for our exports.23 The Bank of Canada would thus clearly need to take the net effects of the Fed’s move into account, alongside many other factors, in making Canadian monetary policy.