Congress Loosens The Pursestrings
The National Bank of Canada | May 01, 2017 09:41AM ET
U.S. civil servants can breathe a sigh of relief this morning, as Congress has reached an agreement that will unblock the $1.1 trillion needed for the government to continue operating until September. President Trump saw several of his wishes rejected – including the famous wall – and only ended up getting 15 of the $30 billion he wanted for the Pentagon. It is nevertheless still heartening that we will not have to deal with the threat of a government shutdown again until September.
On the agenda this week, the U.S. Federal Reserve (Fed) will announce its key rate decision on Wednesday. Although observers expect the status quo to prevail, it will be interesting to hear it given last Friday’s growth results. In addition to failing to meet expectations, the increase in Gross Domestic Product (GDP) of 0.7% proved the weakest quarterly performance since Q1 2014. Given this context, it would be difficult for the Fed to pick up the pace of monetary tightening.
None of the above developments are likely to halt the loonie’s slide after our currency hit its lowest level against the greenback since February 24, 2016 on Friday.
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