The RSM Canada Financial Conditions Index continues to indicate reduced levels of risk being priced into the commodity, equity, bond and money markets. … READ MORE >
monetary policy
FOMC comment: Fed creates context to end pandemic policy efforts
At the monthly meeting of the Federal Open Market Committee, the central bank kept its policy rate unchanged in a range between zero and 25 basis points. But it is clear we have entered the beginning of the end to the Fed’s emergency programs. … READ MORE >
What’s behind the recent decline in 10-year Treasury yields
The yield on 10-year Treasury bonds has dropped nearly 25 basis points to below 1.5%, touching 1.42% overnight on June 11 from its recent peak of 1.74% on March 31. … READ MORE >
Interest rate update: Recent increase shows progress on the path to normalization
The yield on 10-year Treasury bonds is approaching 1.7%, within 20 basis points of already low pre-pandemic rates. The move higher is in response to signs of an economic recovery and perceived risks around inflation. But sub-2% 10-year interest rates are far from what a healthy economy would support. … READ MORE >
Frothy markets and the risk to the economic outlook in the era of low interest rates
The Bloomberg U.S. Financial Conditions Plus Index has reached 2.9 standard deviations above neutral, an unprecedented level that signals the possibility of froth in asset markets. … READ MORE >
Interest rate update: The changing yield landscape, in eight charts
The yield on 10-year Treasury bonds has moved to 1.55%, within 50 basis points of already low pre-pandemic rates. While anything near 1.60% is better than the 0.60% observed last year, we expect the yield to rise to 1.9% at the end of the year. … READ MORE >
Bank of Canada policy decision: Tapering bond purchases by $3 billion a week
An improved economic outlook and growing confidence among central bankers have created the conditions in which the Bank of Canada is now comfortable paring back the pace of bond purchases by $3 billion per week. … READ MORE >
FOMC meeting comment: Welcome to the boomtown
The onset of recovery in the U.S. economy and the growing likelihood of a robust expansion this year and next resulted in a significant upgrade of the Federal Reserve’s Summary of Economic Projections forecast through 2023. … READ MORE >
FOMC preview: Fed to consider adjustments key to the middle market
Much is riding on the Federal Open Market Committee policy rate meeting next week, given recent changes in the economic landscape. … READ MORE >
Flattening Phillips curve implies greater space to address economic needs
During the past few decades, as the economy has shifted from one based on manufacturing to one based on information and digital technologies, this traditionally inverse relationship between unemployment and inflation as shown in the Phillips curve has flattened. … READ MORE >