Wednesday, November 21, 2007

RBC thinks financial market volatility will persist into early 2008

Fed signals steady rates for now; Bank of Canada to stay on sidelines

We are calling for the U.S. economy to grow by 2% in the fourth quarter of this year compared to the 2.7% average rate in the first three quarters on the back of slower consumer spending and business investment as the impact of the late summer tightening in credit conditions damps activity.

Our assessment that financial market volatility will persist into early 2008 as the housing market meltdown continues suggests that investors and lenders will remain cautious and risk averse. Against this backdrop, we have revised our interest rate forecast down and now expect the Federal Reserve to cut the Fed funds rate by 25 basis points in the first quarter of 2008 to ensure that credit markets continue to function and that rates remain low enough to sustain borrowing by households and businesses.

The U.S. housing market slowdown is expected to continue unabated, with residential construction activity contracting at a doubledigit rate. However, this moderating pace of the economy will not, by itself, be enough to prompt the Fed to ease the policy rate again.

Search our GTA and Toronto housing marketplace

Search the MLS or read more about Interest Rates, Power of Sale Properties, Price Trends and more at my website. Homes for Sale

Thank you for reading my blog and if there is anything else I can help you with please don't hesitate to contact me,

Mark

A. Mark Argentino
P. Eng. Broker
Specializing in Residential & Investment Real Estate


Thinking of Selling? Best Mortgage Rates Current Home Prices Search MLS
RE/MAX Realty Specialists Inc.

Providing Full-Time Professional Real Estate Services since 1987

( BUS 905-828-3434
2
FAX 905-828-2829 ÈCELL 416-520-1577
E-MAIL : mark@mississauga4sale.com
8 Website : Mississauga4Sale.com

No comments:

Post a comment