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Weakening Housing Markets Pose A Risk For The Canadian Economy On April 18, Canada’s national banking regulator, the Office of the Superintendent of Financial Institutions (OSFI), released its second Annual Risk Outlook (ARO), outlining what it believes are the most significant headwinds facing the Canadian financial system – and what the regulator plans on doing about it….

Great News On The Inflation Front The Consumer Price Index (CPI) fell sharply in March to 4.3% year-over-year, continuing a pattern of repeated declines. Before we break out the champagne, however, much of the drop in inflation resulted from the steep monthly increase in prices in March one year ago (1.4% m/m), the so-called base-year…

Good News On The Canadian Housing Front The Canadian Real Estate Association says home sales in March edged up 1.4% in March. Homeowners and buyers were comforted by the fall in fixed mortgage rates as the Bank of Canada paused rate hikes. Bond market yields, though very volatile, have trended downward in March, although they…

The Bank of Canada Holds Rates Steady Again But Maintains Its Commitment To 2% Inflation The Bank of Canada left the overnight policy rate at 4.5%, as expected, stating their view that inflation will hit 3% by mid-year and reach the 2% target by next year. They admit, however, that demand continues to exceed supply,…

This morning’s Jobs Report was again solid. Job creation, though more tempered than in earlier months, is still robust. The unemployment rate remained at 5.0% for the fourth consecutive month. Very troubling to the Bank of Canada was the wage inflation, still above 5%. No doubt the Bank does not welcome this news. But the…

Federal Budget 2023…Press the Snooze Button As promised, there would be nothing much in this year’s budget for fear of stimulating inflation. The federal government faces a challenging fiscal environment and a weakening economy. Ottawa promised it would err on the side of restraint. Instead, Finance Minister Chrystia Freeland announced a $43 billion increase in…

Further Decline in Inflation in February Will Keep the Bank of Canada On Hold in April All eyes will be on the Federal Reserve tomorrow when they decide whether to hold rates steady because of the banking crisis or raise the overnight rate by 25 basis points (bps). Before the run on Silicon Valley Bank,…

Housing Market Could Be Poised For A Spring Rebound The Canadian Real Estate Association says home sales in February bounced 2.3% from the previous month. Homeowners and buyers were comforted by the guidance from the Bank of Canada that it would likely pause rate hikes for the first time in a year.  The Canadian aggregate benchmark…

US Policymakers Take Emergency Action To Protect Depositors At Failed Banks Silicon Valley Bank (SVP) had a sterling reputation among the many tech start-ups it helped to finance. What brought SVB down was an old-fashioned bank run set off in 2021 by a series of bad decisions. That year, the stock market boomed, interest rates…

Canadian Labour Market Jeopardizes Rate Pause Today’s Labour Force Survey (LFS) for February was much stronger than expected, questioning how long the Bank of Canada’s rate pause can last. Following the 150,000 jobs gain in January, economists expected a small increase of 10,000 positions and a jobless rate of 5.1%. Instead, the economy added 21,800 jobs in February,…