After sailing relatively smoothly through the choppy waters of the financial crisis and its after-effects, the Canadian economy is finally getting caught up in the global economic slowdown.
For all of the incessant talk from market trading desks on how economic forecasters are hopelessly off track on just about everything, their collective thinking on the subtleties of Fed policy near a potentially historic turning point has been well worth listening to.
China GDP releases are starting to look like near-perfect landings each and every time, in all kinds of weather conditions and visibility.
With Bank of England policymakers ready at a moment’s notice over the past several years to warn anyone who will listen that a rate rise is closer than we think or just around the corner or soon coming into sharper relief, the main instrument it targets – inflation at 2 percent – is having nothing of it.
The Bank of Canada is hoping the average Canadian continues to do the heavy lifting for the economy and gets it out of its rut from the first half of the year, even with dangerously high household debt levels. That may be a big ask.
British workers have hit a sweet spot with wages rising much faster than near-zero inflation, suggesting the economy could gain further momentum as consumers spend their spare cash.
Inflation may be far off target but economists are convinced the United States Federal Reserve and the Bank of England will soon begin raising rates from near zero – with the Fed poised to act as soon as Thursday.
The Japanese yen has strengthened unexpectedly by about 4 percent over the last month and it could rise further if the U.S. Federal Reserve delays a rate hike and the dollar weakens.
That the European Central Bank will have to soon add to its massive stimulus programme is fast becoming the consensus view among economists, although how it will do that effectively is far from clear.