The recent increases in the Bank of Canada and Federal Reserve prime rate in the past few months signal the end of historically low interest rates. According to a Bank of England study released in early 2016, current low interest rates are the lowest in 5000 years of recorded history*!
While the Bank of Canada publicly muses about adopting negative interest rates on Government Bonds as a policy tool to stimulate economic growth, the Bank of Japan recently cut its benchmark interest rate below zero, joining several others including the European Central Bank in the negative interest rate club. According to the February 6th issue of The Economist, almost one quarter of the world’s GDP now comes from countries with negative interest rates.
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