Unpacking the Bank of Canada's pause: FP Video talks to the economists
Donald Trump's trade war fits and starts continued to buffet stock markets and upend international relations this week as the United States president floated a pause on auto tariffs but then barred Nvidia Corp. from selling a specialty chip to China.
Amid this turmoil the Bank of Canada held its key interest rate Wednesday and FP Video talked with economists about the reasoning behind the decision and where policymakers might go from here.
FP Video's Larysa Harapyn also spoke with mortgage broker Ron Bulter about what it will take to get Canada's 'muted' housing market moving. And energy analyst Eric Nuttall filled us in on the opportunities Trump's trade war could create for the Canadian oil industry.
Randall Bartlett, deputy chief economist at Desjardins Group, talks about how the Bank of Canada will want to keep its foot near the brake as it eyes further interest rate cuts.
Ron Butler, a broker with Butler Mortgage, talks about what is happening in the mortgage and housing markets and the role future Bank of Canada interest rate cuts could play.
Eric Nuttall, senior portfolio manager at Ninepoint Partners LP, talks about how Canadian oil producers are stronger than United States rivals as Trump's trade policies rock the world.
Benjamin Tal, deputy chief economist at CIBC Capital Markets, talks about the impact of uncertainty under Trump on Canada's economy, which may already be in recession.
Auto tariffs could be 'quite devastating': Linda Hasenfratz
'Unprecedented' times will test investors: Kelley Keehn
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
8 minutes ago
- Yahoo
May CPI: Inflation pressures ease on a monthly basis as tariff uncertainty lingers
May's Consumer Price Index (CPI) report showed inflation pressures eased on a monthly basis as investors closely watch for any signs that President Trump's tariffs are impacting what consumers pay. The latest data from the Bureau of Labor Statistics showed that the Consumer Price Index (CPI) increased 0.1% month over month, below April's 0.2% rise and a beat compared to economists' estimates of a 0.2% monthly gain in prices. Yearly CPI rose 2.4% in May, a slight uptick from April's 2.3% uptick, which marked the lowest yearly increase since February 2021. On a "core" basis, which excludes volatile food and energy costs, CPI rose 2.8% over the past year in May, matching April. Monthly core prices increased 0.1%, a touch below April's 0.2% gain. Heading into the report, economists had expected core CPI to rise 2.9% year over year and 0.3% month over month. Declines in car and apparel prices, categories expected to show some of the earliest impacts from tariffs, helped drive a cooler-than-expected core CPI reading last month. The report reflects the time period about a month after Trump's "Liberation Day" tariff announcements shook markets and businesses. Since then, many of those "reciprocal" tariffs have been paused, but the 10% baseline duties for most countries remain in place. Mexico and Canada continue to face fentanyl-related tariffs, and industry-specific tariffs on steel, aluminum, and autos remain unchanged. Tariffs on China are still significant even as a truce temporarily pauses big hikes, with the effective tariff rate on Chinese goods hovering around 30%. Early Wednesday, the US and China agreed to a framework and implementation plan aimed at easing tariff and trade tensions. President Trump signaled his approval, saying the deal was "done," pending final sign-off from him and Chinese President Xi Jinping. Core inflation has remained stubbornly elevated due to sticky costs for shelter and services like insurance and medical care. The shelter index rose 3.9% over the last year and 0.3% over the prior month in May. It was the primary factor in the all items monthly increase, according to the BLS. The index for rent and owners' equivalent rent (OER) rose 0.2% and 0.3%, respectively, over the prior month. Owners' equivalent rent is the hypothetical rent a homeowner would pay for the same property. Still, there were signs of easing within shelter. Lodging away from home, for instance, fell 0.1% in May. Outside of shelter, the downside surprise in core inflation was also aided by other categories, including a drop in airline fares, used cars and trucks, new vehicles, and apparel. Meanwhile, the energy index dropped 1% month over month after rising 0.7% in April. On a yearly basis, the energy index was down 3.5%, aided by falling gas prices, which dropped 12% year over year in May. Notably, food prices reversed last month's easing, with the index rising 0.3% last month after a 0.1% decline in April. Egg prices dropped 2.7% from April to May but still remain near historic highs. On a yearly basis, egg prices have climbed around 41.5%. Other indexes with notable increases over the last year include medical care (+2.5%), motor vehicle insurance (+7.0%), household furnishings and operations (+2.7%), and recreation (+1.8%). This is a breaking news report. Stay tuned for updates. Allie Canal is a Senior Reporter at Yahoo Finance. Follow her on X @allie_canal, LinkedIn, and email her at Sign in to access your portfolio
CBS News
9 minutes ago
- CBS News
Trump says U.S. trade "deal with China is done," after tariff talks yield "framework deal"
London — President Trump declared on Wednesday morning that a U.S. trade "deal with China is done." The U.S. leader offered a few key details of a "framework deal" reached between senior U.S. and Chinese trade representatives in London on Tuesday, but he acknowledged that both he and Chinese President Xi Jinping were both yet to formally sign off on the agreement. The U.S. and Chinese trade teams wrapped up two days of marathon negotiations in London close to midnight on Tuesday, with the sides saying they had agreed on a new "framework deal" to ease the trade war between the world's two largest economies. The tension had only increased in recent weeks, despite an agreement reached in Geneva during a first round of talks in May to put the steepest retaliatory tariffs on hold. Those record-high tariffs are due to kick back in on July 9, unless the agreement struck in London is in fact formalized by Trump and Xi. In month since the Geneva talks, Beijing had cut its exports of critical rare earth elements to the U.S. by half compared to the previous year, and the Trump administration said it would "aggressively revoke" the visas of Chinese students in the U.S. who were found to be linked to the Chinese Communist party. While the announcement by Mr. Trump's top negotiators on Tuesday evening of an agreed framework was thin on details, the president said in a post on his own Truth Social media platform Wednesday morning that it was "done, subject to final approval with president Xi and me." He said the deal would see China maintain its current 10% tariffs on goods imported from the U.S., while the U.S. would keep 55% tariffs on Chinese imports. There was no immediate confirmation from China's government of any terms agreed to in the framework, or whether President Xi intended to sign off on the deal. In Geneva, Beijing and Washington agreed in May to put their unprecedented tariffs of more than 100% on each other's imports on hold for 90 days. That brought U.S. tariffs on Chinese imports down to their current level of 30% after they briefly soared to around 145%. Chinese tariffs currently stand at 10%, after hitting 125% before the Geneva round of talks. Speaking Tuesday, Vice Commerce Minister Li Chenggang, who took part in the talks in London, confirmed the agreement on a framework, "in principle." On Wednesday, China's state-run media said the delegations had "made new progress," but offered no details. "The framework deal puts meat on the bones of an agreement reached last month in Geneva to ease bilateral retaliatory tariffs," U.S. Commerce Secretary Howard Lutnick told reporters after the talks in London, which spanned six hours on Monday and then more than 12 hours into the evening on Tuesday. Lutnick said part of the objective of this week's second round of meetings was just to get "the negativity out" of the bilateral relationship, which had festered since the Geneva talks. "Now we can go forward to try to do positive trade, growing trade," he said. The U.S. wants China to resume and increase shipments of rare earths. The materials are vital to industries ranging from weapons and aerospace to electric vehicles and small consumer goods. On Wednesday, in his all-capital-letter social media post, Mr. Trump said under the agreement reached in London, "full magnets, and any necessary rare earths, will be supplied, up front, by China. Likewise, we will provide to China what was agreed to, including Chinese students using our colleges and universities." "Relationship is excellent!" added Mr. Trump. "At stake is the release of rare earths exports to U.S. manufacturers — stockpiles are dwindling fast — in exchange for aerospace parts and semiconductor programming technology to China," Carl Weinberg, chief economist at High Frequency Economics, told investors in a report. "A 'fail' would raise the risk of auto and aircraft production grinding to a halt as soon as next month. If that happens, economic growth will be severely dented for an unknown term."
Yahoo
10 minutes ago
- Yahoo
Musk apology to Trump could reopen path for renewed alliance says Dan Ives
-- Wedbush analyst Dan Ives said in a note Wednesday that Elon Musk's recent apology to President Donald Trump could reopen the path for a renewed alliance, which he views as a "smart move with [the] Robotaxi launch on deck." Musk posted on X, "I regret some of my posts about President Trump last week, They went too far." The Wedbush analyst believes this marks an "important step" in mending fences between the two. Ives feels the apology is crucial because "Musk needs Trump and Trump needs Musk." The firm has observed that the "former BFFs turn against each other has been an overhang on shares of Tesla (NASDAQ:TSLA)," as investors feared a "Trump in revenge mode will make it more difficult for an autonomous future with Tesla front and center." While not expecting a return to their "Mar-a-Lago connected at the hip days," Wedbush anticipates they will "slowly mend the fences" as Trump needs Musk to stay close to the Republican party, and Musk needs Trump for various reasons, including a "green light on a federal framework for autonomous." The timing of the reconciliation is considered notable as Tesla is set to launch its highly anticipated Robotaxi in Austin on June 22. Wedbush sees this as a "major endeavor for Musk and Tesla" and believes the "Trump feud is not getting in the way of this." The core focus for investors, according to Ives, is the "AI Revolution is now coming to Tesla," which will position Tesla as "one of the best pure plays on AI over the next decade" alongside companies like Nvidia (NASDAQ:NVDA) and Microsoft (NASDAQ:MSFT). Wedbush estimates the "AI and autonomous opportunity is worth at least $1 trillion alone for Tesla" and fully expects that "under a Trump White House, these key initiatives will get fast-tracked." They believe "Tesla could reach a $2 trillion market cap by the end of 2026 in a bull case scenario," as the "march to a $2 trillion valuation for TSLA has now begun." Related articles Musk apology to Trump could reopen path for renewed alliance says Dan Ives Ouster shares surge on Pentagon approval for lidar sensor Tesla gains as Musk says he regrets some Trump-related posts Errore nel recupero dei dati Effettua l'accesso per consultare il tuo portafoglio Errore nel recupero dei dati Errore nel recupero dei dati Errore nel recupero dei dati Errore nel recupero dei dati
