The mixed signals from data on job openings and the ISM manufacturing index, both released on Tuesday, offer a nuanced picture of the economy as the Federal Reserve transitions to a period to lower rates. During the transition of interest rates, not everything will go in the same direction. Elevated ... READ MORE >
interest rates
Inflation falls to lowest level since February 2021
August’s data on spending and inflation should put an end to the debate on whether the economy has achieved a soft landing and avoided a recession. The Federal Reserve’s preferred measure of inflation, the personal consumption expenditures index, dropped to 2.2% on a year-ago basis, the lowest since ... READ MORE >
Fed cuts rates to support a soft landing in the economy
The Federal Reserve on Wednesday reduced its policy rate by 50 basis points to a range between 4.75% and 5% to protect full employment and preserve the soft landing it has achieved following a historic price shock. The central bank also laid out a path of monetary policy that suggests additional 25 ... READ MORE >
Canada’s consumer price index hits 2 per cent target
Canada's consumer price index hit the pivotal 2 per cent target in August as inflation continued a downward trajectory, according to Statistics Canada data released on Tuesday. The drop is thanks to lower gasoline prices compared to a year ago. The Bank of Canada will need to continue rate cuts amid ... READ MORE >
U.S. retail sales and industrial production beat expectations
Retail sales in the United States increased by 0.1% in August—much closer to our forecast of a 0.2% increase compared to the market consensus of a 0.2% decline. The stronger-than-expected retail sales data came as industrial production also topped forecasts in August, growing by 0.8% from a month ... READ MORE >
Producer inflation and initial jobless claims stabilize further
While the producer price index came out slightly higher than forecasted at 0.3% on the month and 1.7% on a year-ago basis on Thursday, it remained on a moderating trend with July’s number being revised down. For 18 consecutive months, producer inflation has been in the 2% range or below on a year-ago ... READ MORE >
FOMC preview: Why the Fed’s pivot to lower rates matters
The Federal Open Market Committee’s meeting on Sept. 18 will implement a significant turn away from a focus on price stability—which has been achieved—to supporting maximum sustainable employment. In turn, the policy pivot will create the conditions for greater fixed business investment, increased ... READ MORE >
U.S. August CPI: Further signs of moderation as energy prices decline
Inflation inside the consumer price index continued to moderate in August as the top-line figure increased by 0.2% on the month and by 2.5% on a year-ago basis. Core inflation increased by 0.3% and 3.2%, respectively, on the back of a 1% decline in used cars and truck prices as well as an 0.8% drop in ... READ MORE >
Financial markets update: Front-running the Fed’s first cut, and our new call on rates
Investors expect the Federal Reserve to cut the federal funds rate and signal a series of further cuts through next year at its next meeting on Sept. 18. Those expectations have resulted in a notable decline in 10-year bond yields. By the second week of August, investors had pushed 10-year Treasury ... READ MORE >
Canada’s job market continued to cool in August
The data in Canada's labour survey for August paints a picture of a cooling job market as the economy added a mere 22,000 jobs and the unemployment rate rose to 6.6 per cent. The employment rate rose 0.1 percentage points to 60.8 per cent. More rate cuts are needed, and it will take time for the recent ... READ MORE >