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Central bankers’ plans to steadily increase interest rates this year have been upended by the slowing global economy and falling stock markets.

Barely two months ago, policy-makers – including Bank of Canada Governor Stephen Poloz and U.S. Federal Reserve chairman Jerome Powell – were talking confidently about riding the surging global economy to a future of much higher interest rates.

Suddenly, talk has shifted to themes of patience and flexibility, rather than action, as central bankers digest the conflicting economic signals.

On Wednesday, Mr. Poloz is widely expected to keep the Bank of Canada’s key rate on hold at 1.75 per cent. The central bank is also releasing its first quarterly forecast of 2019 for the Canadian economy, which is expected to be significantly more pessimistic than the one it put out in October.

The possible benefits to consumers are already emerging. As interest rates in the bond market have fallen substantially in the past few weeks, experts are already forecasting that banks will soon move to drop fixed-term mortgage rates. If the Bank of Canada holds rates steady for much of the year ahead, Canadians with variable-rate mortgages will likely be spared being hit with higher monthly costs that many had feared.

Caution is also the watchword at the Fed, where Mr. Powell acknowledged last week that he is “listening very carefully” to financial market jitters and is in no rush to raise rates. On Wednesday, the Fed will release the minutes of its Dec. 18-19 meeting, providing additional clues to how the U.S. central bank intends to deal with the shifting economic and geopolitical environment.

In addition to falling stock prices, the uncertainties include China’s slowing economy, the China-U.S. trade showdown, tumbling oil prices, Brexit fears and U.S. political gridlock.

The Fed had planned up to three rate hikes this year. Many economists now expect two, at most, and some predict none at all.

“If, like his Fed counterpart, Governor Poloz is sensitive to the market’s message, he would be hearing loud and clear that it’s time to again hit the snooze button,” Bank of Montreal chief economist Douglas Porter said in a research note.

The Canadian economic outlook isn’t nearly as rosy as it was just a few months ago. The price of oil and other resources have fallen sharply, stock markets are down 13 per cent since peaking in July and the real economy is slowing. Two key engines of growth for Canada’s economy – consumer spending and housing – have gone cold in recent months.

Many economists expect the Bank of Canada to scale back its outlook for the Canadian economy in the final quarter of 2018 and the year ahead. The bank’s current forecast is for 2.1-per-cent growth in 2019, but the prevailing consensus among private-sector economists is just 1.8 per cent.

A rate hike is off the table for now. The odds of a rate hike this week have fallen to near zero from 80 per cent as recently as October, according to Bloomberg.

But analysts will be parsing the Bank of Canada’s rate statement and its accompanying quarterly forecast for any hints about the future path of rates.

A few months ago, many analysts had expected up to three rate increases this year. Now, financial markets are pricing in no hikes at all in 2019.

But a recovery in crude prices could quickly change the calculus, again, CIBC chief economist Avery Shenfeld warned.

“We see the tone of the statement being along the lines of ‘we’ll get back to you later’ rather than ‘we’re all done here people’ in terms of further interest rate tightening,” Mr. Shenfeld said in a research note. “That would open the door to a rate hike as early as April if oil prices have managed to rebound by then, and oil inventories in Alberta don’t look as bloated.”

The Bank of Canada has previously said it wants to get its key rate up to within its estimate of what’s known as the neutral range of 2.5 per cent to 3.5 per cent. That’s the level at which interest rates are neither driving the economy higher, nor slowing it down.

But the bank has never spelled out how long that process may take. And Mr. Poloz has suggested that the bottom end of the range could be lower than 2.5 per cent.

The outlook for U.S. growth – and rates – is equally murky. A recession appears unlikely in the short term. But the Fed now expects the U.S. economy to slow to 2.3 per cent this year from 3 per cent in 2018.

The recent stock-market turmoil reflects how investors are feeling about the future prospects of companies. And there is a lot to fret about. Failure by the Trump administration to reach a trade truce with China by the end of February could trigger a new round of costly tariffs by both countries. Meanwhile, the U.S. government shutdown could be a prelude to months of destabilizing political wrangling. And while the U.S. economy continues to generate new jobs at a healthy clip, the prospect of a slowing China is already hurting major U.S. companies, such as Apple Inc., which last week sharply cut its revenue forecast.