With a record high stock market, a record low unemployment rate and a strong dollar, Canada is on track to see record levels of activity in the financial sector.
With a record of strong performance in the housing market, Canada’s stock market is expected to continue to soar in coming months, while the housing price index will continue to fall.
The benchmark Toronto Stock Exchange index is now up more than 100 per cent since March and is expected in the range of 18,000 to 21,000 for the full year.
As well, the Canadian dollar is expected on track for its strongest rally since the end of the financial crisis.
The central bank is expected later this week to cut interest rates by up to 0.25 per cent, in the event of a recession, as part of its plan to stimulate the economy.
“The economy is in a strong position,” said Peter Wallison, a professor of economic management at the University of Ottawa.
“We don’t have any major disruptions in the economy right now.”
In fact, the economy is expected expand by about 0.1 per cent in the fourth quarter, the fastest in more than three years.
While Wallison expects the economy to expand at a healthy pace, he does not expect the Federal Reserve to start easing monetary policy anytime soon.
“It would be prudent to wait and see how the economy develops,” he said.
The U.S. Federal Reserve last month lowered its benchmark interest rate to 0,5 per cent from 1,0 per cent.
In December, the central bank cut the key interest rate by a further 0.5 per, from 0.75 per cent to 0 per cent as it tried to boost the economy, as the country recovers from the Great Recession.
Wallison said Canada will likely see a large reduction in its interest rate in the coming months.
“If the economy continues to grow, I think the rate could be a lot lower, especially in the medium term,” he added.