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Canada’s Housing Market Faces Headwinds Despite BoC Moves

The Bank of Canada’s 25-basis-point cut in September was at best ignored by the national market, with sales falling 1.7 per cent compared to the month before. The Bank of Canada’s recent interest rate adjustments have done little to revive the country’s housing market, which continues to struggle under the weight of broader economic concerns. In September, the central bank cut its policy rate by 25 basis points, bringing it to 2.5%. Yet, instead of sparking renewed activity, national home sales actually fell by 1.7% compared to the previous month.  Economists note that the housing market is no longer moving in lockstep with monetary policy, but is instead being shaped by regional affordability challenges, consumer psychology, and—most critically—job security fears. Uncertainty surrounding U.S. trade policy has also cast a shadow over Canada’s economic outlook. Businesses remain hesitant to invest, and households are wary of making major financial commitments such as home purchas...
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Fed Faces New Economic Landscape Post-Trump Victory

 

The U.S. Federal Reserve is poised to reduce its benchmark policy rate by a quarter of a percentage point at the conclusion of its policy meeting on Thursday. This decision, while significant, is overshadowed by the broader economic uncertainties following Donald Trump’s re-election.

Trump’s victory introduces potential shifts in economic policies, including changes to tariffs, tax cuts, and immigration, which could significantly impact the Fed’s approach to managing economic growth and inflation. The central bank, which has been focused on combating inflation, may now need to navigate a more complex economic environment with higher federal deficits and potential inflationary pressures.

Market reactions have already been notable, with bond yields rising as investors anticipate a less aggressive rate-cutting cycle from the Fed. The central bank’s challenge will be to balance these new fiscal policies while maintaining its dual mandate of low inflation and low unemployment.

As the Fed moves forward, the relationship between Trump and Fed Chair Jerome Powell will be closely watched, especially given their turbulent history during Trump’s first term. Powell, reappointed by President Joe Biden, has indicated his intention to complete his term, which runs through May 2026.

In summary, the Fed’s upcoming rate cut is just the beginning of what promises to be a complex and challenging period for U.S. monetary policy.


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