Interest rates are near the historical 'norm': Gordon Reid

After North American central banks drove interest rates up in lockstep last year, one investment professional said interest rates are only now starting to normalize on a longer-term basis.

Gordon Reid, the president of Goodreid Investment Counsel, said that the low-interest environment that persisted for over a decade after the financial crisis of 2008 was an irregularity. According to the U.S. Federal Reserve, the American central bank changed the way it conducts monetary policy following the financial crisis of 2008, as it implemented a near-zero target range for the federal funds rate. 

“Any of us that have a lot of gray hair know that five and six per cent [interest] rates are the norm, [and] historically have been the norm. The good news is that companies and individuals can operate quite effectively in that environment,” Reid said. 

“The period that we had from 2008 to just a year or two ago was the anomaly, it wasn’t the norm.”