According to policy meeting minutes from July, the U.S. Federal Reserve is struggling with the lack of inflation as internal divisions raise questions to whether a third rate increase will even happen at all this year.
The benchmark rate has been hiked twice already and indications after the June meeting were that there would be one more, but this is now questionable.
The concern is that consumers have become so addicted to historically low rates that personal debt has skyrocketed, a problem not only in the U.S., but also of grave concern to the Bank of Canada and the Ministry of Finance.
Even marginally higher interest rates in both countries would slow the massive debt accumulation without having a dramatic negative effect on the economy.
However, the more consumers accumulate debt, the more the chance of an unhappy ending when rates do start to return to normal levels.
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