Viewpoints about Central Bank
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What is stagflation, and how likely is it?
Tariff-related trade tensions have reignited worries about stagflation, a challenging economic brew of high inflation, weak growth, and high unemployment. Stagflation can lead to weakness in both equity and fixed-income markets, and is challenging for central banks to address.
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Fed trims rates—what next?
The U.S. Federal Reserve kicks off the rate-cutting cycle with a 50 basis-point rate cut and signals that there could be more on the way before year end. We take a closer look at what this could mean investors.
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Managing interest-rate risk in 2024 and beyond
In the current macroeconomic environment, where slowing growth and cooling inflation are conducive to monetary easing, we're finding opportunities to tactically embrace interest-rate risk. We explain why we believe geographical diversification and diligently selecting where that duration comes from will be particularly important this year and beyond.
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Data, data, everywhere: Three-minute macro
Data is our word of the month. Despite some surprising signs of economic resilience in the United States, our leading indicators still have us convinced a recession is on the way. Meanwhile, we don’t think the strong unemployment rate is a perfectly accurate description of the current (and future) labor market. Finally, the S&P 500 Index is looking strong so far this year, but we dive into how much of that performance is due to the AI craze.
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Beyond the Fed’s hawkish “pause”: three macro elements to consider
The U.S. Federal Reserve kept rates steady at its June meeting. But looking deeper, there are implications for investors.
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The Bank of Canada “unpauses”—what’s next?
After just a brief moment on the sidelines, the Bank of Canada has announced yet another 25-basis point rate hike. Our experts offer their take on what this means for the economy. Read more.
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Bank on it: the state of Canadian financial institutions in the wake of bank failures abroad
The financial community was rocked by a string of bank failures in March. The failures of Silicon Valley Bank and Signature Bank in the United States could have been seen as isolated events, given their significant ties to the tech community that had seen a major downturn in recent months. But investors were rattled even further when Credit Suisse, one of the 30 global systemically important banks, was acquired by rival UBS to prevent the former’s collapse, followed weeks later by the collapse of First Republic Bank, which became the second-largest bank failure in U.S. history. The banking community was put on notice, including in Canada, where banks play a huge role in our economy.
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The bar to stop hiking is probably lower than the bar to cut rates
Concerns about financial stability may not have stopped the Fed from raising rates; however, there's a growing sense that we're now closer to—if not already at—the end of the U.S. rate-hike cycle.
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Duration calculation: Three-minute macro
Managing duration risk is important for all portfolios, so we modeled duration risk in equities. We also shed some light on what tech layoffs mean (or don’t mean) for the wider economy. Finally, we explain why the Bank of Canada’s aggressive monetary tightening relative to its peers may not be enough to prevent a recession.
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No shortage of risks: Three-minute macro
We examine why the Russian-Ukraine conflict, persistently high inflation, and the Fed’s long-awaited rate hike have investors scared, and detail how food prices are increasing at the fastest rate in four decades. This and more in this edition of Three-minute macro.
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