NEWS

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On the bright side, we've raised our forecast for Q3 to reflect auto plant restarts and the recovery underway in the housing sector. Moreover, inventory replenishment in the US will breathe new life into Canada's export sector and lead to a rebound in economic activity in the current and fourth quarters. But a still-weak global economy will ensure that Canadian growth remains subdued in 2010, with unemployment creeping beyond 9%. This suggests that both Canada and the US might have to adopt further, small stimulus bills to prevent too much fiscal tightening from stalling the recovery in 2011.

As for interest rate hikes, they won't be timed to when economists declare "recovery", but to when the unemployed see a recovery too. With the core inflation rate staying well below 2% throughout next year, the Bank of Canada has the latitude to avoid interest rate hikes and create an opportunity for above-trend economic growth in 2011.

Call Lisa Au for more information
Invis Mortgage Associate
P: (403) 681-0217
F: (403) 277-8079