Politics, Policy, Economics - Since 2010

Fed expects inflation to move up and stabilize. I would have dissented. - CH 02:34 PM EDT, 06/14/2017 (MT Newswires) -- The Federal Reserve...

Fed Raises Rates




Fed expects inflation to move up and stabilize.

I would have dissented. - CH


02:34 PM EDT, 06/14/2017 (MT Newswires) -- The Federal Reserve raised the target range on its benchmark lending rate by 25 basis points as expected on Wednesday, the third increase in the last five meetings, and signalled one more hike for 2017. In an eight-to-one decision the Federal Open Market Committee set the Federal funds target range at 0.75% to 1%, according to a statement. Minneapolis Fed President Neel Kashkari dissented, preferring to keep the rate unchanged. "The labor market has continued to strengthen and that economic activity has been rising moderately so far this year," the FOMC said. "Job gains have moderated but have been solid, on average, since the beginning of the year, and the unemployment rate has declined." The rate was last raised in March, with the FOMC citing solid job gains and a moderate pace of economic expansion. The committee opted to maintain the rate in May, seeing slowing growth in economic activity. The Fed, which targets maximum employment and price stability with an inflation aim of 2%, has long said decisions on rate hikes will be driven by data, as well financial and international events. Data released earlier initially seemed to have diminished the chances of another hike anytime soon. Retail sales declined 0.3% in May for both the nominal and core, missing expectations for a gain of 0.1% and 0.2%, respectively. Excluding sales of both autos and gas, retail sales were unchanged, below the consensus estimate for an increase of 0.3%. The consumer price index dropped 0.1% but was 0.1% higher excluding prices for food and fuel, although both were below expectations. Pantheon's Ian Shepherdson said before the decision that the CPI report wouldn't stop the Fed hiking Wednesday, but if this trend continues through the summer then the next hike, which they had been expecting in September, will be delayed. "Near-term risks to the economic outlook appear roughly balanced, but the committee is monitoring inflation developments closely," the FOMC said. That's a change from May's statement, where the committee said it "continues to closely monitor inflation indicators and global economic and financial developments." In economic projections, members see a 2017 Fed funds rate of 1.4%, unchanged from the previous outlook given in March. That implies one more 25 basis-point hike to come this year. The median for core personal consumption expenditures inflation was lowered for this year to 1.7% from 1.9% in March and held at 2% for 2018. Growth projections for 2017 were raised to 2.2% from 2.1% predicted earlier, and 2018's outlook was maintained at 2.1%.

Are you curious about OPEC? See below- Chaganomics Great slide for the summer from John Kemp at Reuters. 

Oil Prices and OPEC





Are you curious about OPEC? See below- Chaganomics

Great slide for the summer from John Kemp at Reuters. 


While some say Canada is experiencing a bubble (Vancouver/ Toronto) others are stating that Canada is now finding her footing. Asian money ...

Canada's Housing Situation

While some say Canada is experiencing a bubble (Vancouver/ Toronto) others are stating that Canada is now finding her footing. Asian money is flowing in clearly to BC and global money - from Iran to Russia - is said to be flooding Toronto. The house take is: this has been happening for a while for many reasons. One is that Canada is a safe haven. Two is that Canada is a liberal trade focused, commodity country. The latter generally follows free flowing money and commerce, but not always liberal freedom. Canada is unique for that and a great place to be in North America - one which provides a safe real estate asset. It serves as a second America for citzens who need access to a stable market coming from China, Iran, Russia and other countries. In reality Canada has been heating up in multiple markets and urban areas for a while (years and years) and there is a chance the market can become mature and level out. - Chaganomics

Montreal Is Making The Move!

The Teranet-National Bank Composite House Price Index - which measures repeat sales of single-family homes - rose another 1.2% in April, including a whopping 2.6% in Toronto. With April's gain, home prices in Toronto are now up 26.3% Y/Y; in nearby Hamilton, they're higher by 22.9%. In Vancouver, where the local government has taken steps to cool things, prices were lower by 0.1%. Meanwhile, mortgage lender Home Capital Group (OTC:HMCBF) is down more than 10% as it warns on funding. @SeekingAlpha

Canada’s home prices rise for 15th month straight on hefty gains in Toronto, Hamilton. @FinancialPost

Home Capital has plunged by about 60 percent in the past five weeks after a Canadian regulator accused it of misleading investors over an internal probe of fraudulent mortgage loan applications. That sell-off sparked concern it could deflate a soaring housing market that has seen prices soar more than 30 percent in Toronto and Vancouver. @Bloomberg

“There is not evidence that fraud is a widespread problem within the industry but we know it happens. It’s very hard to find and incentives exist for frauding the system so we need to be vigilant,” Evan Siddall, chief executive of Canada Mortgage and Housing Corp (CMHC) told reporters. @FinancialPost