Economics Reports

With expectations that the Bank of Canada might be taking another big step in December, enroute to a bit below neutral next year, the latest In Focus article lays out how to read the tea leaves in this easing cycle.

We’ve been giving some thought to the Taylor Rule. Not John Taylor’s monetary policy guideline, but how one assesses the economic consequences of large scale events, prompted by Taylor Swift’s swing through Toronto and Vancouver in November and December.

Economic models place considerable emphasis on the concept of “potential GDP”, defined as the level of real output that at any point in time is the maximum attainable without upward pressure on inflation.

Chief Economist Avery Shenfeld takesa look at the economic implications of Trump's election victory for our base case. For the macro picture, the three salient issues are tax/spending changes and their impact on budget deficits and borrowing needs, trade policy, and monetary policy (including Fed appointments).

The In Focus report examines the impact of recent immigration target changes on Canadian potential growth, and whether slower population growth could become a headwind to the expected acceleration in economic activity in 2025.

The lead up to major events typically entails a rise in uncertainty, and the event itself then resolves that uncertainty one way or another. But for the upcoming US election, the only certainty is that there could be at least as much uncertainty the morning after we know the winner.

The good news is that Canadian monetary policy is now on a decisive easing path, one that should allow a return to full employment by 2026. Three cheers for that. But forgive us if we do a little Monday morning quarterbacking, by exploring whether, with the benefit of hindsight, all of the economic pain inflicted by high interest rates, in the battle to wrestle inflation back to 2%, was actually necessary.

Our latest In Focus article discusses the potential role of modular housing in easing the housing affordability issue in Canada.

Markets have thrown down their 50 basis point chip on the poker table, betting that the Bank of Canada will deliver an interest rate cut of that magnitude next week. But will the central bankers call that bet, or raise to 75?

What do the latest inflation numbers mean for the path of rate reduction? CIBC Senior Economist Andrew Grantham gives us his insights.

With a US election only weeks away, fixed income investors need to give some thought to how its outcome could impact theFed’s decisions in 2025.

The American labor market looked like it reached a breaking point, and then it didn’t. The September jobs report and the recent revisions to income and the saving rate have provided plenty of ammunition to the no landing camp. But don't get too caught up in one report. The economy does not move in a straight line.

So you might think that by now, economists and central bankers would have a good handle on the trade-off between slack and inflation. You would be wrong. The debate about how much slack is enough to cure high inflation, or whether inflation expectations dominate, is far from settled...

Data revisions can be an economist’s friend or foe, depending on whether they enhance or negate the facts you’ve been drawing on to support your outlook...

Like everyone else, when the US Federal Reserve policy committee prints its new forecasts, our eyes jump right away to the median responses. But what differentiates the Fed from the Bank of Canada is that the committee shows the full distribution of the projections of its members, and there’s meaning beyond the median if you take the time to look at the range of individual forecasts.

As rates drop, what is on the horizon for the US Economy? CIBC Chief Economist Avery Shenfeld shares his thoughts.