TD Canada Trust provides a weekly economic highlight report that we choose to share with our clients and those who follow us. This is an easy place to stay current on the broader economic conditions in Canada and the U.S. so that you are better informed to make stronger decisions around your own real estate investments. We are always available to answer any questions or walk through your real estate investment goals for now or in the future.
- The Bank of Canada met expectations this week, holding its policy interest rate at 1.75%. Communication struck a neutral tone, which, with a downgraded outlook, suggests the bar to monetary easing remains high absent a realization of negative risks.
- There is potential upside to the Bank’s near-term view of economic growth. Housing activity appears to have come back to life in the second quarter. An economic outperformance would likely further reduce Canadian easing expectations.
- In a busy week for Fed communication, Chair Powell gave his semiannual testimony to Congress where he confirmed that crosscurrents hitting the outlook would likely require some additional accommodation.
- The Fed Chair also noted that he doesn’t see the labor market as particularly hot and, with wage growth subdued, has more room to run.
- Powell also noted the risk that weak inflation could prove more persistent than anticipated. That risk diminished somewhat with the June CPI report, which showed core inflation firming across both goods and services.