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Two in a row with more to go was the message from the Bank of Canada today, as economic slack, or “excess supply”, has the economy no longer in need of such punitive interest rates to contain inflation. Today’s quarter point cut to 4.50% came as no surprise, and the June/July moves were consistent with our forecast for 2024’s easing pace.

Alongside a quarter point rate cut that won’t surprise anyone, the Bank of Canada is set to unveil its revised economic outlook.

There’s a long road from the week ahead’s Republican convention to the first Tuesday in November, but if the polls stand pat, Donald Trump would have a good chance of coming out on top...

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.

We’re in the midst of shifting political tides as elections play out in major industrialized economies, but what they have in common isn’t a swing to the left or the right...

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.

While weather forecasters could rely on the immutable laws of physics rather than the vagaries of human behavior, there is a common feature with those of an economist or fund manager. In projecting the wind direction, or the economic and market outlook, you’re looking for the general trend, and needn’t pay heed to every wobble of the weather vane.

The case for a rate cut in Canada next week is obvious. Inflation has decelerated sharply, and labour market slack, best captured by a plunging ratio of vacant jobs to unemployment, has widened further, even over a somewhat better first quarter for GDP.

We were already calling for a June rate cut by the Bank of Canada, but got even better news than we were hoping for in the past week’s CPI print. So why, then, are markets putting only 60% odds on that rate cut, and little credence on the prospect for back-to-back cuts in June and July? That won’t impact the Bank’s decisions, but it behooves us to consider where the skeptics’ views are coming from.

Avery Shenfeld, CIBC’s Chief Economist joins Andrew Grantham, Executive Director & Senior Economist, to discuss Canadian inflation, central bank policy and the Canadian dollar.

The adage that “you are what you eat” clearly applies to inflation in your waistline, but it turns out, is also befitting when it comes to core measures of price inflation in Canada. That might prove to be a helpful hint for market players in the coming week, in which the news on Canada’s CPI for April could tip the balance one way or another on the Bank of Canada’s interest rate decision in June.

We’re getting a lot of questions about the risk of a plunge in the loonie if the Bank of Canada outguns the Fed on rate cuts this year. We see a couple of cents of weakening ahead, but not a sustained devaluation, because of a counterforce that could support the Canadian dollar against the greenback in 2025. But we’re watching another development, across the pond in Europe, that could leave the Canadian dollar more exposed.

Would we all be better off living in straw huts? Does adequate housing make us worse off That seems to be the implication from those who argue that investment in residential real estate has weakened Canada’s GDP per capita, a claim cited in a review of the literature in the April Issue of Statistics Canada’s Economic and Social Reports.

It’s now become a steady countdown, and not one that’s going to be followed by a spectacular liftoff. Financial markets had at one point been pricing-in expectations for six quarter-point rate reductions from the US Fed in 2024, and even Jay Powell seemed to be hinting that the first one could come before midyear. Now even two cuts are seen as no certainty.

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.

The lead-up to today's federal budget saw no shortage of new program initiatives, but staying close enough to fiscal targets, and avoiding inflationary stimulus, required many of these items to be bought on an installment plan.