Economy and Markets

Fed willingness to talk about interest rate cuts sent markets rallying to close out 2023.

A softening economic growth backdrop has left central banks in Canada, the Euro Area, and the U.K. on hold.

The global economic growth backdrop has continued to slow as the lagged impact of aggressive central bank interest rate hikes continue to build alongside a continued squeeze on household purchasing power from the earlier rise in food and energy prices.

Elevated policy rates and tight financial condition continue to slow consumer spending in Canada, the euro area and the UK

Central banks are on pause as surging term bond yields tighten financial conditions further. Canadian population growth is complicating interpretation of macroeconomic data, but there are signs of softening under the surface.

The global economic backdrop is darkening as growth slows in China while elevated interest rates weigh on Canada

Headwinds from higher interest rates and a slowing global economy are building. Canadian GDP edged 0.2% lower in Q2 of this year and early reports are pointing to another decline in Q3. Some factors that weighed on output in Q2 will prove ‘transitory’—including disruptions due to wildfires and a strike by federal workers in April. […]

Robust economic data seemed to bring sunnier days in July. For the most part, global equity indices inched higher as recession fears eased.

Resilient economic growth and sticky inflation are pressuring central banks to push interest rates higher, even as headwinds from higher prices and debt payments build.

Risk appetite is picking up after down-to-the-wire negotiations punted the U.S. debt ceiling issue into 2025.

In both Canada and the U.S., GDP continued to grow in Q1—and consumers kept spending. But the surge in interest rates will continue to take a toll.

Banks are tightening credit standards amid financial sector turmoil. The lending slowdown will weight on U.S. and euro area GDP.