In Focus – US Elections and trade policy: What’s at stake for the US and Canada?

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.

Deputy Chair of CIBC Capital Markets, Roman Dubczak is joined by the Hon. Lisa Raitt (Vice-Chair, Global Investment Banking) and CIBC's Chief Economist Avery Shenfeld to discuss the implications of the US election on Canada and its economy.

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.