Forecasts
May 23, 2025
The First 100 Days: Dazed and Confused
It’s been a whirlwind for forecasters, reminding me of the pandemic days when we were reviewing forecasts every couple of weeks to catch up to policy announcements without a historical reference for what was going to come next. We’ve learned a lot in the first 100 days: The first is that tariffs will remain the economic weapon of choice on a scale greater than anything in recent history. The second lesson is that regardless of whether the Administration back-peddles on initial tariff threats, the goal remains the same.
May 14, 2025
Questions? We've Got Answers: Addressing Issues Impacting the Economic and Financial Outlook
The policy shifts and flips in the first 100 days of the Trump administration have kept forecasters and financial markets on their toes. The administration has moved quickly on multiple fronts, with the unprecedented spike in U.S. tariffs having rippled within equity markets, treasury yields and the U.S. dollar, only now to move in the other direction despite ongoing risks on the tariff front. Once again, this quarter's Q&A is dominated by the potential impacts.
April 29, 2025
Dollars and Sense - U.S. Dollar: The Great Unwind
The U.S. dollar has hit a wall in 2025. After appreciating by over 16% between 2021 and 2024, the trade-weighted dollar has given back over a quarter of those gains in just four months. Many investors are questioning the ability for the U.S. economy to maintain its exceptional global growth position as uncertainty lights up the airwaves.
March 26, 2025
Provincial Housing Market Outlook: Housing on Shaky Foundation Amid Tariff Turbulence
The one-two punch of winter storms and tariff-related economic uncertainty sent a chill through Canadian housing markets in the first quarter. We’re now tracking a double-digit quarterly decline in Canadian home sales and a mid-single digit drop in Canadian average home prices.
March 21, 2025
Long-Term Forecast
Canadian economic growth is expected to run below trend in 2025 and 2026, before finding greater balance in 2027. Slowing population growth and the impact of tariffs on business and consumer sentiment are the drivers of lower growth. Consumer spending had been improving on lower interest rates, but we expect this to act as a drag on growth as higher prices cut into spending power. This has the unemployment rate moving above its long-run level until 2027.
March 19, 2025
Provincial Economic Forecast
We’ve slashed our real GDP growth forecasts for this year from coast-to-coast, reflecting the impact of the Canada-U.S. trade war. Solid Q1 activity across regions will buffer annual averages, but we foresee a mild recession unfolding for Canada in the middle-part of this year.
March 18, 2025
Canadian Quarterly Economic Forecast
Once again, policy shifts from the Trump administration are the main forecast theme this quarter, underpinning a downgrade to the global outlook. There is no way of knowing with certainty what tomorrow will bring in this on-again, off-again policy environment, forcing us to lay out a balanced set of assumptions to underpin this forecast cycle.
January 29, 2025
Reality Bites: Finding the Next U.S. Growth Dividend
With executive orders flying fast and furious from President Trump, investor optimism of an unleashing in animal spirits is kept in check by the reality of simple arithmetic on the economy. The median consensus forecast remains anchored towards 2% economic growth for this year and next. This marks a step down in momentum from the administration years of both Biden and Trump’s first term. Each of those three-year periods had near identical real GDP growth, averaging 2.7%, excluding the exaggerated results from the pandemic period (2020-2021).
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
