The Bank of Canada held its benchmark overnight rate steady at its last meeting in early September. Like the Federal Reserve, Canada’s central bank has been “tightening.” The policy lever had been lifted four times starting in July 2017. It is expected that when monetary officials meet in Ottawa tomorrow they will vote for a fifth. In recent weeks, though, [...]
The ritual of Payroll Friday is not strictly a sorry American phenomenon. It is one shared by our neighbors to the north. The Canadian version, thanks to M. Simmons filling in the gaps of my limited experience with it, doesn’t typically sink into the depths of silliness to which its US cousin explores. At least not in as many months. [...]
The Q2 GDP report (+4.1% from the previous quarter, annualized) was heralded by the administration as a great achievement and certainly putting a 4 handle on quarter to quarter growth has been rare this cycle, if not unheard of (Q4 '09, Q4 '11, Q2 & Q3 '14). But looking at the GDP change year over year shows a little different [...]
This will be a fairly quick update as I just posted a Mid-Year Review yesterday that covers a lot of the same ground. There were, as you'll see below, some fairly positive reports since the last update but the markets are not responding to the better data. Markets seem to be more focused on the trade wars and the potential [...]
In the last update I wondered if growth expectations - and growth - were breaking out to the upside. 10 year Treasury yields were well over the 3% threshold that seemed so ominous and TIPS yields were nearing 1%, a level not seen since early 2011. It looked like we might finally move to a new higher level of growth. [...]
There are a lot of reasons why interest rates may have risen recently. The federal government is expected to post a larger deficit this year - and in future years - due to the tax cuts. Further exacerbating those concerns is the ongoing shrinkage of the Fed's balance sheet. Increased supply and potentially decreased demand is not a recipe for [...]
The market volatility this year has been blamed on a lot of factors. The initial selloff was blamed on a hotter than expected wage number in the January employment report that supposedly sparked concerns about inflation - although a similar number this month wasn't mentioned as a cause of last Friday's selling. The unwinding of the short volatility trade exacerbated [...]
There has been a lot of talk about the economic impact of the recent tax reform. All of it, including the analyses that include lots of fancy math, amounts to nothing more than speculation, usually informed by little more than the political bias of the analyst. I am guilty of that too to some degree but I don't let my [...]
The unemployment rate, I’m sorry to report, didn’t tumble all the way to zero. Pity. It did stay at 4.1% for the fourth straight month. Because of that, wage pressures should be exploding right now. That seems to be the verdict in markets this morning, a rumble of inflation shot right through everything at the release of the payroll report. [...]
Economic Reports Employment We received several employment related reports in the first two weeks of the year. The rate of growth in employment has been slowing for some time - slowly - and these reports continue that trend. The JOLTS report showed a drop in job openings, hires and quits. The Fed has been talking about a tight labor market [...]
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