There is some empirical evidence that in the euro area, as well as in a broader sample of OECD countries, long-term rates are reacting less to changes in short-term rates than they used to. 35 Global factors seem to be increasingly important for the determination of national real bond yields.
With that in mind, I’d like to take this opportunity to explain the path we’ve taken, not only in terms of yesterday’s decision but also more generally. In my remarks, I will look back on these separate paths that Canada and the United States have followed over the past several years.