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An Interconnected World: How a Weak Yen Could Influence Canadian Housing Affordability
In early August 2026, the United States and Japan carried out a rare joint currency intervention, the first such action since 1998. U.S. Treasury Secretary Scott Bessent said the United States sold euros and bought yen, while Japan’s Ministry of Finance sold dollars for yen. The coordinated action was aimed at stemming the yen’s sharp…
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Labour Markets Point to Stable Rates
Recent economic data are reshaping expectations for interest rates in both the United States and Canada. In the U.S., the case for further Fed rate hikes has weakened. A soft July jobs report, lower energy prices, and a less aggressive tone from Fed officials have all contributed to the shift. Bond yields fell, while the…
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The Outlook for Mortgage Arrears in Canada
Recent headlines warn that Canadian mortgage arrears have climbed to their highest level in nearly a decade, driven by a wave of higher-cost renewals, elevated inflation, and rising unemployment. While the headlines are attention-grabbing, the underlying story is less dramatic. Mortgage arrears, defined as payments overdue by 90 days or more, have risen nationally from…
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The Fed’s New Communication Strategy: Warsh’s Approach and the Bond Market Reaction
Kevin Warsh took over as Federal Reserve chair with the goal of scaling back its communications, arguing that years of extensive forward guidance had made markets overly reliant on Fed signalling rather than economic data. In his view, a leaner Fed voice would help restore market discipline. Since taking office, Federal Open Market Committee (FOMC)…
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Are We Building the Right Kind of Housing?
Housing economist Frank Clayton recently published a report for the C.D. Howe Institute examining the mismatch between housing preferences and housing supply in the Greater Toronto and Hamilton Area (GTHA). Drawing on three independent surveys — CMHC’s Mortgage Consumer Survey, the Toronto Regional Real Estate Board’s annual buying and selling intentions survey, and Sagen Canada’s…
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Is Housing a Drag on the Economy?
According to CIBC Economics, falling home prices and eroding real estate wealth are creating a negative wealth effect that is acting as a significant headwind for consumer spending in Canada. Conventional economic theory holds that changes in household wealth are an important driver of economic activity, influencing household consumption decisions. The permanent income hypothesis, for…
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Canada’s Housing Market — Are We Near the Bottom?
Canada’s housing market appears to have found a floor, as recent resale data suggest homebuying activity is picking up after a weak start to the year. June data show existing home sales rose 0.9 per cent from a year earlier and 0.5 per cent from May on a seasonally adjusted basis, while new listings fell…
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