Morning Market Brief: March 18, 2024

All eyes on the Fed

The US Federal Reserve Board (Fed) makes its second interest-rate announcement of 2024 this week. The time has come after all the predictions and market movements in anticipation of this monetary policy announcement. While markets will be fixated on the Fed, there’s no shortage of critical economic announcements from Canada and elsewhere around the world. Here’s what to watch for this week.?

• Statistics Canada (StatsCan) will announce Canada’s inflation rate for the month of February on Tuesday. The annual inflation rate ticked lower to 2.9% in January. While inflation has trended downward, the Bank of Canada (BoC) stated it needs to see proof it will reach its 2% target before considering interest-rate cuts.
• The Canadian Real Estate Association announces existing home sales on Wednesday. Sales of existing homes increased over December and January, largely in response to a rise in demand on expectations the BoC might begin lowering rates this year.
• The week concludes with Canadian retail sales data on Friday. After rising by 0.9% in December, StatsCan estimated retail sales dropped by 0.4% in January, which would be the first decline since August 2023.
• South of the border, the Fed makes its interest-rate announcement on Wednesday. The target range for the federal funds rate currently sits at 5.25%–5.50%. Markets are widely expecting the Fed to hold steady.
• Globally, key economic announcements include European inflation today, China’s rate announcement on Tuesday and the Bank of England’s rate announcement on Thursday.

It will be a busy and critical week for economic announcements, which will likely set the stage for financial market considerations until the next batch of central bank meetings. Comments from the Fed and Canadian inflation data will have a considerable impact on North American equity and bond markets this week. Most investors are hoping both will show a strong likelihood of rates coming down sooner rather than later.

At?CIBC Private Wealth , we aim to take a comprehensive approach to managing, building and protecting your wealth. If you'd like to discuss this market and economic update in more detail, please get in touch with your advisor any time.