Global financial conditions continue to flash red as global central banks acted forcefully to address the economic and financial effects of the COVID-19 virus. The Federal Reserve put a punctuation mark on monetary policy, dropping the fed funds rate back to the zero lower bound (ZLB) boosting asset purchases, opening dollar swap lines and reducing the rate it charges at its discount window. … READ MORE >
Canada
Fed intervenes in credit markets, but will it be enough?
The Federal Reserve along with its major central banking partners moved on Sunday to restore functioning credit markets in an attempt to put a floor under the global economy and calm financial markets. … READ MORE >
As coronavirus spreads, pain goes beyond the hospitality and travel industries
As the human and economic toll of the coronavirus mounts, the real estate industry in North America is wondering where it can safely place its bets. The hospitality industry has taken the brunt of the hit so far, but other sectors of the economy have been nervously watching as the events unfold. … READ MORE >
Real economy faces severe test as coronavirus challenges to business activity mount
Volatility across asset markets and the end of the 11-year bull market run in equity prices strongly implies that the current business cycle will soon come to an end, if it hasn’t already done so. … READ MORE >
Bank of Canada lowers policy rate in response to health crisis
Canada’s central bank moved aggressively to drop its policy rate by 50 basis points, to 1.25%, following action taken by the Federal Reserve on Tuesday. … READ MORE >
Holding interest rates steady, Bank of Canada keeps the door open for a cut
The tone of the Bank of Canada’s policy statement would imply that it stands ready to cut rates to bolster the domestic economy should growth slow. … READ MORE >
USMCA is a solid opportunity for the middle market
The pact, called the United States-Mexico-Canada Agreement, includes a chapter dedicated to small and medium enterprises – a first for a multilateral trade agreement – and also adopts a wide array of provisions from the abrogated Trans Pacific Partnership trade treaty. Both of these provisions are major wins. … READ MORE >
The Bank of Canada’s dilemma — stability versus rate cut
While maintaining the overnight rate at 1.75% would appear to be prudent at the very least, we would argue that the Bank of Canada should strongly consider cutting rates in the near term. … READ MORE >
Canada added 35,200 jobs in December, exceeding estimates
The Canadian economy added 35,200 jobs in December, significantly greater than the 25,000 expected by economists. This partially offsets the 71,000 job losses in November’s Statistics Canada labor market survey. The unemployment rate fell by 0.3 percentage points to reach 5.6%, near the historic low of 5.5% last recorded in October of last year. … READ MORE >
As global economy slows, populism looms as long-term threat
The global economy has been buffeted recently by trade tensions between United States and China and slowing growth. But a greater risk looms around the world in the form of rising populism that threatens to unravel the postwar economic order, said Joseph Brusuelas, chief economist at RSM. … READ MORE >