HIGHLIGHTS OF THE WEEK – June 21

United States
• Markets were mixed on the week, seemingly undecided on how to score continued headlines from Washington,
disappointing U.S. economic data, and the Fed’s confident tone accompanying its rate hike.
• The Fed anticipates that the recent softness in inflation to prove temporary. Its outlook for future rate hikes
remained unchanged. We expect the process of reducing its balance sheet will begin in the fall, with a
modest pace of rate hikes continuing thereafter.
• Other economic data this week was a tad on the soft side. But our outlook for the U.S. economy to post
solid growth of 2.2% this year, and 2.1% next year has not changed, as a fundamentally strong consumer
and better global growth help support the U.S. economy.

Canada
• Despite falling oil prices and soft equity markets, the loonie saw robust gains this week as investors digested
a marked change in tone from the Bank of Canada.
• Bank of Canada communications this week suggested that the era of emergency level interest rates may
end earlier than expected. It now appears likely that the first policy interest rate increase in more than six
years will take place in October.
• Robust growth in recent quarters and a constructive outlook suggest that inflation is at or near a bottom,
justifying the removal of some monetary accommodation. Only a gradual pace of policy rate increases is
expected thereafter, reflecting the challenges still facing the Canadian economy.

For further information, please contact:
John Maveety Manager, Residential Mortgages – Greater Ottawa Area TD Canada Trust
T: (613) 371-1984 F: (888) 899-1984 P: (866) 767-5446
John.Maveety@td.com