Economics

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?

Our latest In Focus report by Benjamin Tal and Shaun Hildebrant, President of Urbanation, take a closer look at the economics of condo investment in the GTA.

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.

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.

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.

Into the start: Global equities are mixed over the weekend, with Europe outperforming and Asian indices the underperformers.

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...

Into the start: Global equities are generally higher overnight, while rates are rangebound to slightly higher. US markets are closed amid the July 4th holiday.

Into the start: Global equities are lower, being led by European stocks amid continued French election uncertainty. The USD has continued to rally, although today it is being driven by weaker risk.

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.

Into the start: Global equities and rates are generally rangebound to start the day. The USD is mean reverting slightly lower from yesterday’s strength. SEK is underperforming given slightly dovish Riksbank guidance.

Into the start: Very quiet overnight session with no major events. European equities are underperforming, while the broad USD is mixed against G10 pairs. Otherwise, narrow ranges in G10 FX

At the center of the efforts by the federal government to limit population growth is the newly introduced cap on international students and targeted decrease in the number of temporary residents to 5% of the population over the next three years.

Into the start: Global equities are broadly higher as political risks continue to fade. 10Y OAT-Bund spreads have continued to narrow, amid a solid OAT auction.

Benjamin Tal, Deputy Chief Economist, CIBC and Katherine Judge, Senior Economist, CIBC discuss how labour market dynamics and inflation risks are impacting Bank of Canada policy.

Our latest issue of Economic Insights, by Benjamin Tal and Katherine Judge, looks at the current labour market mismatch in Canada, and its implications.