Bank of Canada doesn’t have to follow the example of aggressive rate hikes in the U.S.

According to a former vice chair of the U.S. Federal Reserve, Randal Quarles, in case the U.S. decides to keep raising interest rates significantly, the Bank of Canada doesn’t necessarily have to do the same.

“In my opinion, with all the connections between our economies, there will be some kind of significant tracking of rate increases,” – noted the chairman and co-founder of The Cynosure Group.

“However, I don’t think the Feds’ decisions should be followed, and I’m pretty sure that Governor Macklen won’t do it, as he will be doing what’s right for Canada.”

Quarles also noted that the U.S. Federal Reserve will keep doing “what’s necessary” in order to get inflation back under control, and even a recession can’t stop its aggressive rate increase strategy.

“The expectations of a recession might lead to a weaker inflationary pressure and that may let the Fed moderate its course slightly,” – he said.

“Nevertheless, if it believes inflationary pressures are still there, the expectation of a recession in the nearest future will not change its course.”

In September, the U.S. central bank raised its key lending rate by 0.75% for the third time in a row, leading the target for the benchmark federal funds rate to a 3-3.25% range.

On September 21, U.S. Federal Reserve Chair Jerome Powell has made it clear that there would be more significant rate increases soon. He also admitted that the central bank’s decisions will hurt certain Americans.

“We’ve just moved into the lowest level of what could be restrictive and, we definitely have more to do,” – Powell said.