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For the first time since December 2008, when the Fed’s trendsetting funds rate was effectively cut to zero, borrowing costs will begin to head back up — likely to 0.625 per cent, at first.

Whenever the decision, it will send a message to the world — and Canada directly — that the U.S. recovery is well entrenched.

Even more than other industrialized nations, Canada relies heavily on the U.S. for trade and investment. Any change in monetary policy south of the border will flow into this country as U.S. companies and consumers ramp up spending — and take advantage of the weaker Canada dollar.

The timing and direction of Canada’s next move is still a work in transition for Bank of Canada governor Stephen Poloz. After a four-and-a-half-year period of stable monetary policy — anchored by a one-per-cent interest rate — the central bank rocked financial markets in January with an untelegraphed cut to its lending benchmark, taking it down to 0.75 per cent.

Poloz described the sudden move away from a neutral policy stand as “insurance” against the anticipated economic damage from the global oil-price collapse.

“We have the Fed very gradually raising its U.S. fed funds rate in the second half of the year. Meanwhile, the Bank of Canada will actually be cutting,” predicts David Madani, the Canadian economist at Capital Economics.

“That’s a view based on our views of the macro economy, with the energy sector shock being much larger [and] the improvement in the non-energy sectors being more gradual and smaller.”