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Beware the Bond Market – Part 1
In the 1990s, Democratic political adviser James Carville said: “I used to think that if there was reincarnation, I wanted to come back as the president or the pope or as a .400 baseball hitter. But now I would like to come back as the bond market. You can intimidate everybody.” Not that long ago…
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Labour Market Strength Raises Uncertainty on Rate Hikes
Friday’s unexpectedly strong US payroll numbers raise uncertainty about whether the Fed will need to raise short-term rates one more time in either November or December. Non-farm payrolls increased by 336,000, surpassing the consensus estimate of 170,000, and the numbers for July and August were adjusted upwards by 119,000 jobs. The unemployment rate held steady…
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Is the Economic Slowdown Enough to Keep the Bank of Canada on the Sidelines?
An eye on rates on other market updates During his time as Federal Reserve Chair, Alan Greenspan was known for his decisive use of monetary policy to rescue markets in times of turmoil. Dubbed the Greenspan Put, his policy approach was designed to halt excessive stock market declines and stabilize financial markets. While this approach…
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Fixing Past Housing Policy Choices: Looking Back to Move Forward
While a shortage of rental housing has contributed to the current housing crisis, the problem is not a new one. After booming in the 1960s, construction of purpose-built rental housing stagnated following the rollback of federal tax incentives in the 1970s, as rental housing became less lucrative for developers. Since then, tax rules affecting rental…
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Restoring Housing Affordability
Can we build 5 million homes in 7 years? In its latest report, Canada’s Housing Supply Shortages, the Canada Mortgage and Housing Corporation (CMHC) maintained its 2022 projection that Canada needs nearly 3.5 million additional housing units – on top of the 1.66 million units already planned – to close the housing affordability gap by…
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Stronger Than Expected Labour Market Unlikely to Push Rates Higher
The Canadian jobs market has followed a sawtooth pattern this year, with soft months followed by an uptick. This trend continued through the summer, with August job gains coming on the heels of losses in July. While the most recent data suggests a slight rebound in the labour market, the gains are not strong enough…
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Weaker GDP Should Convince the Bank to Hold on Rates
After a strong start to 2023, the Canadian economy appears to be slowing rapidly. Instead of the 1.2% (annualized) growth analysts expected in Q2, the Canadian economy contracted by 0.2%. This unexpected decline in gross domestic product (GDP) aligns with the recent rise in unemployment and suggests the Canadian economy may already have fallen into…
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