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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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Revitalizing the MURB Program – What Past Mistakes Can Teach Us
Rental housing policy has been a persistent challenge in Canada for more than five decades, shaped by two key forces. First, efforts to close federal tax “loopholes” in the early 1970s discouraged private investment in rental housing, making it financially unviable. As a result, private sector participation in rental housing has been negligible for more…
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US Outlook – Weakening Economy Raises Risk of Recession
The most likely scenario for the US economy is a slowdown. Although a downturn as severe as those during the pandemic or the Great Financial Crisis is unlikely, the US economy is losing momentum and is likely to fall into a recession. If economic policies lead to increased trade barriers, reduced immigration, and even larger…
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