Historically, they tend to move together, but as it's been said before, central banks were late to raising rates and then started playing catch-up. The last 8 times that tightening cycles similar to this one have ended, were only when central bank rates exceeded the inflation rate. We are finally seeing this. Another clue that we may be done with rate hikes? Why does this matter? It should provide more certainty to the market, businesses and Canadians, that the rate increases we have lived and inflation over the last 2 years is closer to normalizing.
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