Financial Markets
January 17, 2025
Ready or Not, Here He Comes
Donald Trump will be inaugurated on Monday, and Canadians are bracing for the economic threats in recent weeks to turn into action through a flurry of executive orders. To assess the magnitude of this threat, here are the areas of economic growth and jobs most at risk on Trump’s return to the White House.
November 27, 2024
Questions? We've Got Answers: Addressing Issues Impacting the Economic and Financial Outlook
Investors must feel like 2024 has given them whiplash, as expectations for interest rates turn on a dime from one quarter to the next. The Trump trade is the latest catalyst, as the incoming administration's policies are perceived as inflationary, leading markets, and ourselves, to reduce the number of fed rate cuts expected.
November 06, 2024
Markets Brace For Higher Inflation and Interest Rates Under President Trump
As of 11 AM ET, Donald Trump has secured 277 of the 538 Electoral College votes, becoming the 47th president. While ballots are still being counted, President Trump also looks to have won the popular vote, which has not happened for a Republican president since George W. Bush in 2004.
November 01, 2024
Canada’s interest rate conundrum: Too much of a good thing
A call for a jumbo cut to head off mortgage reset rates must be assessed carefully. Surprisingly, roughly a quarter of mortgages will reset at a LOWER interest rate next year. For those renewing into higher rates, the shock might be milder than expected, given a 30% increase in home prices and wages. Years of debt repayments have also built equity room, which homeowners, including those with variable-rate-fixed-payments mortgages, can use to lower payments if needed.
October 25, 2024
Is 50 the New 25?
No, I’m not talking about age, although I’d greatly benefit from that view! I knew I would eat crow on Wednesday’s Bank of Canada (BoC) call with the high market pricing for a 50 basis point (bp) cut. There’s no regret in having conviction that risks need to be managed when the Bank delivers a rate cut that historically aligns to emergency periods. It could condition Canadians to expect data misses to be met with large monetary responses. I was hoping this would be clearly addressed in the press conference. Unfortunately, it was not, and there was little indication on where the bar is set for another 50 bps in December
October 21, 2024
Why I’m willing to eat crow on the Bank of Canada call
I find myself in an unusual position of advocating for a 25-basis point reduction in the Bank of Canada policy rate come Wednesday, when all bank peers have moved into the 50 basis point camp. When the Bloomberg poll was conducted in early September, not a single hand was up for 50 basis points. The dramatic shift in private sector sentiment in the past couple weeks occurred in the absence of Bank of Canada communication or signals. Wednesday will tell us how beholden the BoC is to market expectations.
October 15, 2024
U.S. Presidential Elections and Stock Markets: It’s the Economy…Obviously
The U.S. Presidential election is just weeks away and investors are quickly turning their attention to the potential implications for financial markets. Would a Trump or Harris win be better for the stock market?
August 26, 2024
Dollars and Sense: Ready… Set... Cut! Cut! Cut!
The Fed is finally ready to cut interest rates, but questions remain on the speed and magnitude. We penciled in 25 basis points per meeting, with over 250 bps in cuts over this year and next. However, now that the Fed is confident that inflation will return to target, it will prioritize a little more of the other side of its dual mandate – developments in the job market – to ultimately determine the speed and size of rate cuts.
