Sales of existing homes fell for the 11th straight month in December, finishing their worst year since 2008, the National Association of Realtors reported on Friday. Still, there is some room left for sales to fall further as the Federal Reserve has signaled that it will continue to tighten monetary ... READ MORE >
monetary policy
U.S. inflation eases in December, supporting a moderation in Fed rate hikes
A third straight month of improvement in top-line inflation data implies that conditions are moving in the direction where the Federal Reserve can consider further moderation in the pace of its rate hike campaign to restore price stability. The tone and tenor of the data imply an underlying ... READ MORE >
Canada job gains top forecast, complicating decision on rates
The Canadian labour market once again kept managers, investors and, most important, the Bank of Canada on edge as it added 104,000 net jobs in December, significantly higher than the forecast of 5,000. December was the second month in the last three that job gains exceeded 100,000. The ... READ MORE >
U.S. economy generates 4.5 million jobs in 2022 as labor market remains hot
If one would have asked a year ago if the economy would expand at above a 2.5% clip and produce 4.52 million jobs by the end of the year, all while the Federal Reserve raised its policy rate by 450 basis points, the answer would probably have been no. But that is just where the economy stands ... READ MORE >
Financial conditions and Canada’s real economy
Tightening financial conditions are hurting the Canadian economy to the point where the rising risk of a recession and a housing contraction much larger than anticipated cannot be discounted. Although we expect the Bank of Canada to raise its policy rate to a peak of 4.75% early next year, after ... READ MORE >
Did fiscal spending go too far? Assessing the global economy.
Fiscal responses by governments around the world during the pandemic were unprecedented. Many governments put forward anywhere between 20% and 30% of gross domestic product in spending to mitigate the impact of economic shutdowns. Now, after months of elevated inflation and surging interest rates, ... READ MORE >
The post-pandemic era and the end of hyper-globalization
The American economy is in the midst of a long-lasting structural change following the severe shocks unleashed by the pandemic. The hyper-globalization that has dominated the global economy over the past 30 years is giving way to an era of regionalization that is radically altering the flow of ... READ MORE >
Amid global economic turmoil, stress grips fixed-income markets
Regime change in the global financial markets and the international economy is in play. Investor and policy expectations around globalization, growth and liquidity are all rapidly changing as central banks lift interest rates to put inflation back in the box. It is highly likely that the American ... READ MORE >
FOMC policy decision: Fed hikes policy rate by 75 basis points
The Federal Reserve’s price stability campaign advanced at its Wednesday meeting via a hike in the federal funds policy rate by 75 basis points to a range between 2.25 and 2.5%. The central bank stuck to its pace of balance sheet reduction. At this critical juncture, with the policy rate residing in ... READ MORE >
The Real Economy, Volume 86: How the Fed is managing its dual mandate
Download the full report. The Federal Reserve faces a difficult task in fulfilling the two mandates it has been given by Congress: Achieving full employment while keeping inflation in check. In this month’s issue of The Real Economy, our chief economist, Joe Brusuelas, examines how the Fed, with ... READ MORE >