TD/ Canada Trust Economic Highlights – September 25

Highlights of the Week – September 25

United States
• Finally, midway through 2017 global growth is looking better than it was a few months ago. Our latest Global Outlook discusses how the optimism that has been missing for several years has finally returned.
• With stronger global growth comes tighter monetary policy. This week the Fed formally took the next step of starting to reduce the size of its balance sheet.
• The Fed also reaffirmed that it expects to hike rates again this year. Our U.S. Outlook looks solid over the next two years, despite the hit from the devastating hurricanes. Reduced economic slack should lead to higher inflation, consistent with a gradual pace of rate hikes over the next two years.

• The data flow this week remained broadly consistent with our updated view that the Canadian economy is likely to maintain above-trend growth in the third quarter.
• On balance, wholesale activity for July provided some upside risk to our outlook for third quarter growth, while
retail and manufacturing sales volumes were less supportive. On the price side, headline and underlying measures of inflation rose slightly in August, suggesting that prices may have finally stabilized after a soft spell.
• Overall, we anticipate that the persistence of above-trend economic growth will likely motivate the Bank of Canada to push up rates by another 25 bps before the end of the year.

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