TD / Canada Trust Economic Highlights – Dec. 23


United States

  • The Federal Reserve announced it will slow the pace of asset purchases from $85bn to $75bn per month starting in January, marking the beginning of the end of Chairman Bernanke’s signature policy.
  • The future pace of bond buying will be data dependent, but cuts of $10bn per FOMC meeting are expected.
  • The Fed also reinforced its forward guidance through verbiage around the theme that “thresholds aren’t triggers,” indicating that “it likely will be appropriate to maintain the current target range for the federal funds rate well past the time that the unemployment rate declines below 6-1/2 percent.”
  • After sailing through Congress last week, the Senate passed the Bipartisan Budget Act with 64 votes for and 36 against. The bill is expected to be signed by the President shortly.


  • In the coming year, the Canadian economy will remain in a moderate growth environment. Consumer spending will continue to be the driving force behind headline GDP growth, buttressed by a decent pace of job and income growth.
  • Export growth is expected to be modest, but will be an important contributor to the broader economy. An acceleration in U.S. and European economic growth in 2014 underpins this expectation, though a weaker Canadian dollar should also provide a boost.
  • The Bank of Canada will likely remain on hold until late-2015 due to weak inflationary pressures.


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