Time for a Pause
Bradley Goldhar - Apr 29, 2023
Next Wednesday the US central bank will likely raise short-term interest rates by a further 0.25% - this will be the 10th increase since they started raising rates at the beginning of 2022 to slow the US economy and bring down inflation. Accompanying the rate increase will be commentary on the likely path of future rate increases (the “dot plots”) and the markets are expecting a pause (the Bank of Canada is already in that mode). The reasons the US central bank may pause raising interest rates is lower inflation readings and the ongoing concern about the health of the US regional banking system. The timing of the potential pause coincides with an active period of quarterly earnings announcements and so far the results are generally better than expected and the stock markets are in positive territory so far this year – the TSX Composite +6.4% and the S&P 500 +8.4% (i).
Talking of pauses, I will be out of the office for a couple of weeks (sandwiching a vacation around a BMO advisor conference) returning Monday May 15th.The full team will be available to help in my absence.
Click on the link to access "Focus" publication from our economics team.
Brad
Bradley Goldhar | Senior Portfolio Manager and Senior Investment Advisor