Author archives

Avery Shenfeld joins Ali Jaffery to discuss the US federal election and the future directions of trade policy under a Trump or Harris presidency, and what this would mean for the US and Canada.

Trade policy is now front and center in the US federal election, particularly for observers in Canada. Should he win, Donald Trump is promising a turn towards increased protectionism. Kamala Harris has come out against a broad increase in tariffs, but hasn’t been critical of the existing protectionism when it comes to China, and her record as a Senator shows a tilt towards tougher environmental standards in trade deals. A lot is at stake for Canada, but we see reasons to hope that we’ll steer clear of some of the darker scenarios out there.

Avery Shenfeld joins Ali Jaffery to discuss the labour dispute in Canada’s rail sector, what commodity prices are telling us about the global economy, and the future direction of monetary policy after Federal Reserve Chair Jerome Powell’s speech at Jackson Hole.

Ian is joined this week by Ali Jaffery in CIBC Economics. The duo begin the episode by taking stock of the intense market volatility seen over the past week, and whether what triggered the moved has a real fundamental basis. Ali discusses the other pockets of strength in the U.S. economy, concluding that the U.S is slowing but not enough to warrant non-standard sized cuts, like 50.0bps. Ian discusses the triggering of the Sahm rule within the context of Okuns Law, and Ali spends time talking about the underlying dynamics of the U.S. labour market. Ian and Ali go back-and-forth on what a faster Fed means for the Bank of Canada, ultimately landing on the view that the Bank can slow down if the Fed is speeding up. Ian finishes the episode discussing his favorite trades, and the implication of what a faster Bank does to 5yr yields, and thus 5yr mortgage rates.

With core inflation almost a half percentage point above target and inflation expectations well-behaved for sometime, is there a chance for the Fed rate cuts?

Ian is joined this week by CIBC’s Senior Economist, Ali Jaffery, and the focal point of the episode is to preview the upcoming Bank of Canada interest rate decision. Ali begins the episode outlining his view on forecast changes, and the likelihood that the Bank shifts from outcome-based guidance to forward-guidance. Ian talks about current market pricing for the BoC relative to the Fed, highlighting why he thinks there is too little priced in mid-2025. The pair do a deep dive on the impact of a 2025 trade war, specifically what it means for global growth and central bank responses. The episode finishes with Ian discussing reasons behind recent CORRA dislocations, and the need for a change in how QT is being managed.

Ali Jaffery joins Katherine Judge to discuss the outlook for shelter inflation in the US and Canada and why mortgage interest costs may increasingly distort the Bank of Canada’s preferred core measures of inflation.

Our latest issue of In Focus, by Avery Shenfeld and Ali Jaffery, titled “Seeking shelter from shelter inflation” offers evidence that points to a much tamer path ahead for the housing component of inflation in Canada and the US.

Avery Shenfeld joins Ali Jaffery to discuss why May’s inflation report needn’t deter the Bank of Canada from a rate cut in July, and the implications for bond market investors.

In this episode of Eyes on the Economy, Katherine Judge chats with Ali Jaffery about potential monetary policy divergence between the Bank of Canada and the Fed, and what it means for Canadian inflation.

This In Focus report looks at how far the Bank of Canada and the Fed can diverge. We find that the Bank of Canada could manage a 100bps divergence in the current context with only modest inflationary consequences.

Ali Jaffery and Katherine Judge discuss the strength of the US consumer, which reflects a wave of wealthy retirees and lifestyle changes associated with work-from-home, as well as implications for monetary policy from the permanent shift in spending preferences towards goods and away from services.

Americans’ voracious appetite for goods is being driven by a wave of wealthy retirees and lifestyle changes associated with work-from-home. And while consumers aren’t immune to a slowdown, the permanent shift in spending preferences towards goods and away from services is complicating the Fed’s ability to achieve its inflation goal, as the chances of returning to the ultra-low goods inflation era that was seen over the post-financial crisis period have dwindled.

Avery Shenfeld, CIBC’s Chief Economist, joins host Ali Jaffery to discuss Canada’s Federal Budget, where it stands relative to previous forecasts, and the implications of it for the broader economy, the Bank of Canada and the markets.

What the Bank of Canada is likely to say about where the neutral rate is, and why one size doesn't fit all for Canada and the US.

This past week demonstrated the largest amount of macro divergence over the past several years, with one major central bank hiking rates while another cut, at the same time the Fed straddles a dovish and hawkish message. This week, Ian is joined by Ali Jaffery in CIBC Economics, and the duo begin the episode by discussing these events. Ali makes the case that the macro story across developed markets is still linear, and monetary policy is moving to an easing cycle. But how deep that easing cycle will be is the ultimate question, and what it means for the bond market is what Ian tries to unravel. Ian discusses his view on the yield curve, suggesting that a lack of tradeoff between inflation and growth leads to higher longer-term yields for any given level of the overnight rate. Ian goes as far as to call the time of death of the flattener, noting we have firmly moved into a trend steepening cycle. The duo discuss the recent BoC speech on balance sheet normalization, and end the episode opining on the recent BoC Survey of Deliberations and what that means for the timing of the first cut.