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Weathering the Tariff Storm
The Canadian economy appears to have held up better than expected in the early months of the trade war. Real GDP grew at a 2.2 per cent annualized rate in Q1, outperforming the US economy, which posted a decline. This was even a slight improvement over the previous quarter, which was revised downward by half…
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Do House Prices Need to Fall to Restore Housing Affordability?
Canada’s new Minister of Housing and Infrastructure Gregor Robertson has the unenviable task of improving housing affordability. He has attracted criticism for stating that falling housing prices are not necessary to accomplish this goal. For prospective buyers, lower home prices may appear to be the obvious solution, but do we really want a collapse in…
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Bonds – Not So Boring Anymore
US President Donald Trump’s “big, beautiful” tax bill was passed by the House of Representatives last Thursday and is headed to the Senate for approval. If it becomes law, the bill will cut taxes and increase spending. While this could provide a near-term boost to the economy, it is expected to increase the federal deficit…
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Government Debt and Housing Finance – It’s Complicated
Moody’s recent downgrade of the US sovereign credit rating (from AAA) sends a clear signal: the country’s fiscal situation is becoming untenable. While this downgrade doesn’t change the US’s overall credit rating – which was already split-rated AA+ – it now brings all three major credit rating agencies into alignment. S&P first downgraded the US…
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Sticky Core Inflation Likely to Delay Bank of Canada Rate Cuts
Canadian CPI fell 0.1 per cent month-over-month in April, bringing the headline inflation rate down to 1.7 per cent from 2.3 per cent in March. The decline, slightly less than economists expected, was driven by the removal of the consumer carbon tax at the start of the month and a sharp decline in global oil…
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Will Snowbirds Revive the Canadian Housing Market? Don’t Count on It
A recent Financial Post article speculates we will see a decline in homebuying activity in the US – a trend that’s not surprising given the current political climate, ongoing economic uncertainty, and a relatively weak Canadian dollar. Canadians have long been the dominant foreign buyers in the US housing market. For many in Central Canada,…
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Breaking Down Recent Market Developments
China and the United States have agreed to lower tariffs on goods from each other’s countries for 90 days, offering a temporary reprieve in a trade war that threatens to cause a global recession and deepen a widening rift between the world’s two largest economies. As shown in this chart from the New York Times,…
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