Article source: ConstructConnect

Try thinking like a central banker. Your main goal at the moment is to bring down inflation to around +2.0% year over year. Your primary weapon to achieve that end is high interest rates. They’ll slow consumer spending and housing starts, but they will also cause collateral damage in labor markets. Signs of kinks in jobs creation will be greeted with a smile.

Given this framework for success, how will the Federal Reserve and the Bank of Canada be viewing the latest (July) reports on employment in their respective countries. The Fed will be accepting, but not delighted. The Bank of Canada (BoC) will be pleased, but with a measure of regret.

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Article source: ConstructConnect

In the Fall of last year, considerable anxiety was induced among investors when the world’s major stock market indices plummeted.

Now, it is nice to be able to report that those days are over. As of July 2023’s month-end closing values, both the DJI and S&P 500 were within 5% of their previous all-time highs; NASDAQ has climbed back to within 10%.

Early in August, a small wrinkle to investing enthusiasm has been delivered by Fitch’s downgrade of U.S. government debt from AAA (i.e., as good as it gets) to AA+ (just a shade below ‘rock solid’).

The timing and the reasoning are interesting. Fitch does not like the fact Washington keeps running into a debt ceiling and there is always a game of brinkmanship in Congress before it is resolved. This does not speak well of America’s efforts at good governance, according to Fitch.

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