Residential Market Update

Market Commentary

The U.S. Federal Reserve has triggered the latest round of speculation about interest rates with the release of the minutes of its July meeting. Those notes seemed to indicate a bias toward an interest rate hike.

At the time that might have been true but since then there have been some changes, in particular China’s devaluation of its currency and the growing strength of the U.S. dollar. American exports are hindered by a strong greenback and a rate hike would only add to that problem. There are also concerns U.S. employment is still not as robust as the Fed would like.

There are concerns the Fed needs to worry about its “credibility” if it does not implement a rate increase during its September 16 – 17 meeting. But, all but a handful of analysts expect the Fed to leave its policy rate unchanged.

In Canada the central bank announces its next interest rate decision on September 9th. Between now and then both unemployment and GDP stats will be updated.

The GDP numbers are widely expected to show Canada has dropped into a technical recession and the unemployment figures are expected to show, continued, uneven job growth.

-Provided by First National

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