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Lapointe Investment Group

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CIBC Private Wealth

January 29, 2025

Economy Professionals Commentary In the news News
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Economic activity continues to expand and the US leaves rates unchanged

 

The US Federal Reserve (Fed) maintained the target range for the federal funds rate at 4.25% to 4.50%. Although the Fed acknowledges that inflation remains somewhat elevated, it confirms recent indicators suggest economic activity continues to expand at a solid pace, the unemployment rate stabilized at a low level in recent months and labour market conditions remain solid. The Fed aims to achieve maximum employment and inflation rates of 2% and confirms although the goal is currently roughly in balance, it remains attentive to the risks of this dual mandate.

 

CIBC Capital Markets says it was no surprise that the Fed held the target range for the federal funds rate. Uncertainty around trade policies with Canada, Mexico and other countries is leaving the Fed in a wait-and-see mode—in line with today’s decision to hold rates.

 

Steven Dubrovsky, First Vice-President, Global Fixed Income, CIBC Asset Management says today’s accompanying statement from the Federal Open Market Committee (FOMC) is modestly hawkish as the Fed upgraded its view on the labour market to solid and characterized inflation as “somewhat elevated” which doesn’t offer a lot of confidence that it sees inflation moving in the right direction or progressing as expected. “We see the path to lower inflation to be stalled and are actively looking for any signs of improvement moving forward.” He confirms “bond yields rose modestly following the rate announcement. However, the market seems to be disappointed with the lack of any forward guidance and a clear future path of interest rate relief.”

 

At CIBC Private Wealth, we 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 or have questions about your investments, please get in touch with me anytime.

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CIBC Private Wealth” consists of services provided by CIBC and certain of its subsidiaries through CIBC Private Banking; CIBC Private Investment Counsel, a division of CIBC Asset Management Inc. (“CAM”); CIBC Trust Corporation; and CIBC Wood Gundy, a division of CIBC World Markets Inc. (“WMI”). CIBC Private Banking provides solutions from CIBC Investor Services Inc. (“ISI”), CAM and credit products. CIBC Private Wealth services are available to qualified individuals. Insurance services are only available through CIBC Wood Gundy Financial Services Inc. In Quebec, insurance services are only available through CIBC Wood Gundy Financial Services (Quebec) Inc.


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