The Bank of Canada announced another 50-basis-point rate hike on Wednesday while it continued to shrink its balance sheet, another aggressive step in its campaign to tame inflation. … READ MORE >
interest rates
U.S. April Consumer Price Index: Peak inflation provides no solace
About the best one can say about the April inflation report is that year-over-year metrics appear to have topped while core inflation increased. … READ MORE >
Fed policy and the natural rate of interest—a delicate balancing act
The current estimate of the natural rate of interest is 0.5%, hardly enough to compensate for the risk of investment. … READ MORE >
FOMC decision: Policy, price stability and balance sheet strategy
The Federal Reserve on Wednesday showed that it intends to achieve price stability, maximum sustainable employment and long-term growth despite the risk of a higher unemployment and a hard landing of the economy. … READ MORE >
Why the U.S. dollar is strengthening
Policy by the central bank, interest rate differentials and a risk haven move into U.S. dollar-denominated assets are driving up the dollar against major trading currencies. … READ MORE >
Interest rate update: Confidence in the Fed, but uncertainty over long-term growth
The Federal Reserve has started to normalize interest rates, lifting the short-term transaction cost off the zero bound. The result has been a 100-basis point increase in the yield on 10-year Treasury bonds. … READ MORE >
Bank of Canada raises rates by a half percentage point
In an effort to target inflation that is at its highest level in decades, the Bank of Canada on Wednesday increased its policy interest rate by 50 basis points, to 1%, and said it would begin to reduce its balance sheet, known as quantitative tightening. … READ MORE >
U.S. March jobs report: American labor market remains red hot
The American labor market remains red hot as the employment-to-population ratio among prime-age workers surged to 80.0% in March, up from 79.5% in February. … READ MORE >
Chart of the day: Initial jobless claims remain low
New claims for jobless benefits increased by 14,000 last week to 202,000, continuing to stay below the pre-pandemic level in 2019. The increase was likely temporary as the labor market remained tight. … READ MORE >
The housing market will endure interest rate hikes
While low interest rates have contributed to the increased demand for housing, the factors driving the market go beyond low rates and include a thriving economy, favorable demographics and a limited supply. … READ MORE >