TD/ Canada Trust Economic Highlights – August 23

Highlights of the Week – August 23

United States
• A relatively good week for economic data was overshadowed by geopolitical events. Volatility spiked late in the
week, the Dow suffered its largest one day loss since May on Thursday, and the 10-Year Treasury rallied to 2.17%.
• Investor nervousness is understandable, but there is little reason to doubt the ongoing economic expansion. U.S. retail sales rose by a robust 0.6% in July and were upwardly revised in June.
• Minutes from the FOMC’s July 26 rate announcement showed a Fed looking for proof that inflation is moving toward target, and agreeing that balance sheet reduction should begin soon (likely in September).

• The Canadian housing market slowed for the fourth consecutive month in July on the back of government policy
changes as well as deteriorated affordability related to elevated prices and rising mortgage rates.
• Other sectors of the economy are expected to help offset the economic impact from a slowdown in housing, but
real GDP growth will likely slow from 3.7% in Q2 to 1.7% in Q3.
• The full year performance of the Canadian economy will remain solid, and economic slack soon fully absorbed. At the same time, inflation is starting to tick-up, which should keep the Bank of Canada on track to continue raising interest rates.

For further information, please contact:

John Maveety Manager, Residential Mortgages – Greater Ottawa Area TD Canada Trust
T: (613) 371-1984 F: (888) 899-1984 P: (866) 767-5446