On the other hand, risks in the international commodity and financial markets persisted, primarily those associated with volatile movements in global oil prices and divergent monetary policies of the ECB and Fed.
Indeed, with signs of emerging capacity pressures, and with the need to sustain non-inflationary economic growth in Canada, the Bank raised interest rates the day after our appearance before this Committee. These higher interest rates led to some cooling off in domestic demand in Canada. What we, and most other analysts, did not anticipate was the abrupt slowing in U.S. economic growth.