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Loss of independence of U.S. Fed would particularly affect Canada: BoC’s Macklem
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iStockphotoThe head of the Bank of Canada says the risk of a loss of independence at the U.S. Federal Reserve is also a threat to Canada.
Speaking Wednesday at a news conference after the latest rate decision, bank governor Tiff Macklem said the pressure the U.S. central bank has faced is contributing to wider uncertainty.
“The U.S. Federal Reserve is the biggest, most important central bank in the world, and we all need it to work well,” said Macklem.
Fed interest rate changes can affect the dollar’s exchange rate against other currencies and the value of foreign investors′ U.S. assets.
Tony Stillo, director of Canada economics at Oxford Economics, said if U.S. Fed policy rates become politically motivated, it could lead to knock-on effects in Canada.