By Don Pittis, CBC News Posted: Dec 13, 2017 5:00 AM ETLast Updated: Dec 13, 2017 10:56 AM ET
Most expert commentary says Janet Yellen will say goodbye with a hike and a promise of more
In a few hours we’ll know for sure, but it seems like a foregone conclusion that Janet Yellen will use her last monetary policy news conference as chair of the U.S. Federal Reserve to raise interest rates.
And even though Bank of Canada governor Stephen Poloz decided to hold Canadian rates steady at one per cent last time around, there is no way Canadians can escape the impact of Yellen’s actions.
According to most expert commentary, the biggest surprise would be if the outgoing Fed chair failed to raise rates at all.
The most recent Canadian policy statement seemed to play down the prospects of an imminent increase that neither the government nor many overborrowed Canadians would like to see. But according to economist Louis-Philippe Rochon, rising U.S. rates will give Poloz permission to hike.
Political and popular backlash
“Poloz is looking to raise rates, but there’s always some political backlash, some popular backlash,” says Rochon, co-editor of the book series New Directions in Post-Keynesian Economics and economics professor at Laurentian University. “This is just going to give him the ammunition.”
But a single rate rise either here or in the U.S. may not be the most important thing Yellen talks about today.