Central banks around the world have tightened policy by raising interest rates, restraining some of the domestic factors behind inflation in different countries. That’s resulting in slower growth in global demand overall, especially for durable goods. The Bank of Canada is no exception. We raised the policy rate eight consecutive times starting in March 2022.
Our higher interest rates are starting to slow growth in household spending, particularly in sectors that are sensitive to interest rates. And, overall, higher rates are helping to rebalance demand and supply.2 That being said, a broad range of labour market indicators have shown only modest signs of easing to date.