After some massive increases in interest rates, there may be many Canadians who want the Bank of Canada to stop now. Many real estate workers, and some who want to lend you money or sell your investments, would be happy if we all agreed that the recent interest rate hikes made by the central bank were a huge mistake and that the world will return to the lowest interest rates that helped with that.

Cheap mortgage payments, low cars, and rising stocks pump money into the Canadian economy, while low interest rates lead to higher home prices, make borrowing cheap for companies to invest or buy back shares, and increase the value of current bonds.

But while Canadians await the Bank of Canada's decision on Wednesday on whether to raise interest rates or not, voices warn caution; while there are many who will benefit, at least in the short term, if interest rates remain near their recent lows, others say this is just wishful thinking.

Loretta Mester, President of the Federal Reserve Bank of Cleveland, said: "We really can't substitute wishful thinking for compelling evidence." Supporting the chairman's comments at the Jackson Hole symposium held by the Federal Reserve Chairman, which suddenly ended a sharp market rally, Mester said we can expect the leading federal funds rate in the U.S., currently at 2.25 to 2.5 percent, to rise above four percent.

Loretta Mester, President and CEO of the Federal Reserve Bank of Cleveland, also warned that the interest rate on federal funds in the U.S. could rise to more than four percent, pushing consumer loan interest rates above six percent. She says exactly how high interest rates will go depends on the inflation trajectory; as we have seen over the past two years, except for a few dissenting analysts, neither markets nor central bank governors have been good at predicting this trajectory.

While the Bank of Canada ostensibly sets interest rates independently of the U.S. Federal Reserve Board, the same forces operate in the integrated North American economy, where deviation too far from U.S. rates greatly affects the relative price of the Canadian dollar and harms exports if it rises too much.

The current interest rate hike expectations for Wednesday by economists are spread all over the map, but the consensus before the Labor Day weekend was that Canadian central bankers will raise interest rates by another three-quarters of a percentage point to 3.25 percent, with subsequent increases of a quarter percentage point.