The Federal Reserve, Rates, and Office Technology

Mar 18, 2022


You can’t turn on the news, read a newspaper, or listen to any podcasts or radio without hearing about inflation, its impact on consumers and businesses, and the pending rise in interest rates across all industries. Similar to other central banks like the U.S. Federal Reserve, the Bank of England, and the European Central Bank – the Bank of Canada has a primary charter to keep the Canadian economy operating at optimal efficiency and mitigate risks that present challenges to the economy.

Today, the primary threat to the health of the global economy is inflation. In January, the Canadian consumer price index surged 5.1% ‒ more than economists expected. When prices surge for too long it has a negative impact on consumers and businesses through the erosion of purchasing power, additional inflation, currency devaluation, and ultimately an increase in borrowing costs. Along with the U.S. Federal Reserve, the Bank of Canada has limited tools to impact the economy with interest rates being their primary driver for change. We observed the power of interest rate changes most recently at the onset of the pandemic when we saw rates lowered to combat a potential recession. Since then, we have benefitted from a low-rate environment and central banks have made clear their intention is to again use incremental rate changes to combat inflation.

So, what does all this mean for office equipment dealers, manufacturers, lessors, and our joint customers? It means for a period of time we will all see the downstream impact of the rate increases.

With inflation where it is today, it is both imperative and expected that Central Banks increase the short-term borrowing rate for commercial banks, which will have a significant impact on both short-term and long-term interest rates. DLL is committed to working closely with our office equipment dealer and manufacturer partners to navigate the Fed's increases together and continue offering tailored solutions to fit their needs."

said Laurens Hessels, Global Head of Finance for Soft Assets at DLL.

With so many other global factors playing into the state of the economy, like supply chain challenges, geo-political tension, and the remaining COVID-19 infections, staying closely aligned to our partners and ensuring that our products and services support their goals and objectives is more important than ever. Like many of the challenges our economy and businesses have faced the last two years because of the pandemic and its reverberations, the rate increases will require three key factors: clear communication, the right financial tools, and strong relationships. At DLL, we are committed to all three. Want to learn more about our products and services? Contact Us Today!