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  • North American Outlook

    June 10, 2021 | 12:07

    Follow The Leader

    profile photo of Sal Guatieri

    Sal Guatieri

    Senior Economist and Director
    Economics

    Sal Guatieri is a Senior Economist and Director at BMO Capital Markets, with over two decades experience as a ma... (Read more)

    profile photo of Sal Guatieri

    Sal Guatieri

    Senior Economist and Director
    Economics

    Sal Guatieri is a Senior Economist and Director at BMO Capital Markets, with over two decades experience as a ma... (Read more)

    More
    Key Summary

    The U.S. economy is reaping big dividends from its speedy vaccine rollout and fiscal stimulus, with the economy accelerating in the first half of the year and on track for 7.0% growth in 2021, the most since 1984.


    Canada will soon follow its biggest trading partner. While renewed lockdowns likely stalled growth in the spring, a peppy start to the year and a sharp rebound as businesses reopen should keep it on track for 6.0% in 2021, the most in about half a century.


    Stimulus and vaccines are causing U.S. demand to rebound much faster than supply, creating many side-effects, notably rising inflation, early in the recovery.


    The Bank of Canada has shifted policy gears by tapering asset purchases. While both it and the Fed may wait until early 2023 to raise rates, hefty fiscal stimulus and brewing inflation could advance the timing.

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