(July 14 – 14:15 ET) – All the economic signs are paving the way for summer rallies in North American bond and stock markets, according to a new report released today by BMO Nesbitt Burns Economics.
“The question now is sustainability of the slowdown,” says Sherry Cooper, chief economist, BMO Nesbitt Burns, in her quarterly Financial Chartbook. “Will this be another second quarter headfake, like the ones in the past two years where growth slowed only to rebound sharply in the second half of the year? My guess is no.”
Cooper says the economic cycle is far more advanced now than in the past and that both Canada and the U.S. are experiencing the effects of rising interest rates, economic capacity constraints and muted inflation pressures.
“It is too early to entirely rule out another Fed rate hike at the August 22 meeting,” says. Cooper. “But if the incoming data continue to, on balance, confirm the slowdown, the Fed’s tightening moves may well be over for
now.”
-IE Staff