Economy and Markets

With the building blocks of a consumer-led recovery remaining in place, we think central banks will be easing off the accelerator next year. – RBC Economics

We are optimistic about the outlook but risks remain elevated given the uncertain path of the virus. Base effects associated with reopening, rising commodity prices, policy stimulus and higher input costs have boosted inflation rates. – RBC Economics.

We think the key question shaping up for 2022 is, can central banks continue to hold rates low until economies fully recover, or will inflation concerns force them to act more conventionally and raise rates in advance?

Central banks are acknowledging inflation will be more persistent than previously expected.

The spread of the Delta variant and slow vaccination rates in many emerging economies created a detour in the road to recovery for the global economy.

Economic recoveries are seeing some loss of momentum, but central banks are generally sticking to their scripts.

Advanced economies generally continued to regain their footing with July reports showing a strong increase in growth and improving labour market conditions.

After a stubbornly dovish March FOMC meeting—strong growth forecasts accompanied by a flat dot plot and no taper talk—we thought a more balanced tone from the US central bank was just a matter of time. And the Fed indeed changed its tune in June, signaling rates will indeed have to rise in 2023 given strong […]

Canada and Europe continued to ramp up their COVID-19 vaccination programs in May, trying to close the gap to early leaders the US and UK.

The outlook for the global economy improved over the past three months because of increased policy support and rising vaccination rates.

RBC Economics expects both the BoC and Fed to raise policy rates by 50 basis points in 2022, while the other central banks are likely to remain on hold.

Vaccines, stimulus boosting advanced economy growth prospects, pushing bond yields, equities higher in March.