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OECD Upgrades Growth Forecasts: U.S. Economy Shows Resilience Amid Tariff Challenges

OECD Raises U.S. and Global Economic Growth Forecasts Amid Stronger-Than-Expected Performance

The OECD has raised its economic growth numbers for the U.S. and for world markets. It sees strong work by key markets in early 2025. This change shows a more positive view than before. Ongoing trade disputes and higher tariffs still add strain.

Stronger Global Growth Forecasts

In its report on Tuesday, the OECD raised its global GDP growth stake to 3.2% for 2025. This is more than the 2.9% listed in June. The group now expects a slight dip next year, keeping a 2.9% rate for 2026. For context, global growth hit 3.3% in 2024. The report links this rise to improved work in many world markets. The OECD said that growth stayed strong through early 2025. It pointed to steady industrial work and active trade, even as political issues stay.

U.S. Growth Outlook Improved

U.S. growth forecasts also went up. The OECD now sees a 1.8% rise in U.S. GDP for 2025, up from 1.6% in June. Still, this is lower than 2024’s 2.8% rate. The rate for 2026 is set at 1.5%.

The growth boost comes from:
• Big investments in AI tech
• Support from sound fiscal plans
• Steady work by consumers and workers

Trade and Tariff Impacts Still Loom

The report warns of many risks. New tariffs, which started in August 2025, have not shown all their effects. The U.S. set high fees, with an average of 19.5%, a rate not seen since 1933. These tariffs hit many imports, with some fees at 50%.

The OECD noted that companies have cut costs by lowering profits. Still, these rising fees now affect:
• What consumers pay
• Company buy decisions
• Worker job conditions

In several regions, labor trends show softer work markets. Unemployment is up and job offers fall. Unclear trade policies also slow down investments and trade flows.

Inflation and Market Risks

The organization now sees headline inflation in G20 nations at 3.4% for 2025. This is a small drop from 3.6% in June. In the U.S., the inflation rate was trimmed to 2.7% from 3.2%.

But risks stay that might change these numbers:
• More tariff hikes may come
• Rising price pressures might appear
• Some nations face hard fiscal times
• Financial markets, including crypto links, may waver

Potential Upsides

Two opportunities may push growth even further:
• Fewer trade limits could clear up uncertainties and boost trade
• Faster AI tech work may add to productivity and new ideas

Summary

The OECD’s new view shows a strong start in global markets during early 2025. Emerging markets and tech investments in the U.S. have worked well. Trade problems and tariffs still pose risks. Yet, easing limits and rapid tech work may help keep growth steady in the years to come.

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Fed Cuts Interest Rates, But Mortgage Costs Soar: Unpacking the Disconnect in the Bond Market

The Fed Cuts Interest Rate, but Mortgage Costs Climb Amid Rising Long-Term Yields

The Fed cuts its rate in a bold step. Consumers still see steep mortgage costs. Short-term loans drop in cost. Long-term U.S. Treasury yields move higher. Mortgage rates follow these yields. The market does not work as many expected.

Fed’s Rate Cut and Market Reaction

On Wednesday, the Fed drops its lending rate by one quarter-point. The target now sits at 4.00%–4.25%. This is the first cut in 2025. Fed Chair Jerome Powell explains the move as a risk management step. Stock buyers cheer the cut and push equities to high marks. Bond traders watch long-term yields rise after a small drop. They doubt the shift in Fed policy.

Treasury Yields on the Rise

  • The 10-year Treasury yield hits 4.145%. It fell below 4% for a short time before climbing again.
  • The 30-year Treasury yield, linked to mortgages, moves to about 4.76%. It had been near a low of 4.604%.

Peter Boockvar, Chief Investment Officer at One Point BFG Wealth Partners, says bond traders do not favor rate cuts when inflation stays high. They sell long-term bonds. This drop in price makes yields go up. It shows the simple bond rule: low price ends up with high yield.

Inflation Concerns and Economic Outlook

The Fed’s new outlook shows faster inflation in 2026. This news makes some worry that softer policy may miss the chance to check price rises. Even though the Fed has cut rates several times since early 2024, the 10-year yield stays near its old level. Weak job data led some to hope for a focus on new jobs. But bond buyers see high long-term yields as a sign to stay cautious. Inflation still runs above the Fed’s 2% aim.

Impact on Mortgages and the Housing Market

Higher Treasury yields push mortgage rates up. Right after the Fed spoke, mortgage rates climbed. This rise wipes out gains seen when rates hit a three-year low. Homebuilder Lennar notes the tough scene. The Miami firm missed its revenue mark for Q3. It warned that high interest costs slowed deliveries.

The Bigger Picture for Investors

Chris Rupkey, Chief Economist at FWDBONDS, points to a long-term view in the bond market. Investors watch for hints on future rate moves and more cuts. Boockvar reminds us that U.S. Treasury yields feel the global mood. Other nations see higher rates, which adds to the bond market mix.

A Caution on Yield Movements

Lower long-term yields can point to fear of a recession. In this case, higher long-term yields may hint at stronger jobs and lower unemployment claims. Rupkey notes that a drop in yields is not always a sign of good news. Often, it comes with economic slowdowns and job losses.
"The bond market tends to focus on very bad news — not just bad news… but really grim news," Rupkey comments. He shows that the market sends mixed signals when it comes to the economy.

In summary, the Fed cut rates to support the market amid weak job hints. Yet, long-term bond yields push mortgage costs higher. This twist adds caution for both buyers and lenders. The housing sector may feel the change as banks adjust to the new market mood.

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Steve Bannon Proposes Bold Leadership Move: Can Scott Bessent Lead Both Treasury and the Fed?

Steve Bannon Proposes Dual Role for Scott Bessent as Treasury Secretary and Federal Reserve Chair

Steve Bannon, a close White House aide and former chief strategist under President Donald Trump, has set out a new idea. He wants Scott Bessent to serve as both the U.S. Treasury Secretary and the head of the Federal Reserve at the same time. This idea was raised during a podcast chat with Sean Spicer, who worked as President Trump’s press secretary during his first term.

Bannon’s Unusual Idea

Bannon wants Bessent to keep his current job at the Treasury while also leading the Federal Reserve for a short period. On a podcast scheduled for 6 p.m. Friday on YouTube, Bannon said:

“I am a strong believer that on a temporary basis, Scott Bessent should be both the leader of the Federal Reserve and the Treasury secretary, and then step down from Treasury after the midterm elections to fully take over the Fed.”

No modern leader has ever held both roles at once. In the past, before the Banking Act of 1935 set up how the Fed works today, the Treasury Secretary held a seat on the Fed’s Board of Governors by default. But having one person head both key financial bodies is new and untested today.

Reaction from the White House

Even though Bannon has some sway in parts of the administration, the White House did not accept the idea. A spokesperson said:

“Such an arrangement is not being and has never been considered by the White House.”

This statement makes clear that officials have no plan to give Bessent both roles.

Context on Scott Bessent and Fed Leadership

Scott Bessent is now the U.S. Treasury Secretary. He also plays a part in finding a new leader for the Federal Reserve as Jerome Powell’s term ends in May 2026. Reports note that about 11 candidates are being examined for the Fed Chair role. Bessent was once mentioned as a possible candidate, but he has shown that he is happy in his current job at the Treasury.

The top job at the Federal Reserve is very important. The person in charge sets the rules for money and credit, which affect growth, prices, and jobs. Jerome Powell has faced criticism from former President Trump over how the Fed handles interest rates.

Historical Note and Examples

There is no current case where one person runs both the Treasury and the Fed at the same time. Janet Yellen once led the Fed and later became Treasury Secretary, but she did so in different periods. Bannon’s plan would bring both roles together at once.

Summary

  • Steve Bannon suggests that Treasury Secretary Scott Bessent should hold both Treasury and Federal Reserve roles temporarily.
  • The White House quickly dismisses this plan.
  • No recent example shows one person in charge of both agencies at once.
  • Bessent helps with the Fed Chair search, yet he focuses on his Treasury work.
  • Jerome Powell’s term as Fed Chair ends in May 2026 amid high political and economic scrutiny.

Bannon’s idea is unlikely to move forward, but it adds to the talk about who will lead the Federal Reserve and guide U.S. economic policy as the nation gets closer to the midterm elections.

Stay tuned to CNBC and other trusted financial news sources for updates on the Fed Chair search and U.S. economic leadership.

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Germany’s Economic Revival: Experts Remain Skeptical Amid Sluggish Growth and Spending Delays

Germany’s Role as Europe’s Growth Driver Under Scrutiny by Economists

Germany sits as one of Europe’s main economic powers. Economists now question its ability to spark growth for the entire continent. Earlier this year, experts focused on Germany with hope tied to a strong economic bounce. This rebound was expected to lift the euro zone and Germany alike. New data and expert views now show that these hopes might come too soon.

High Hopes Amidst Policy Shifts

The surge of hope came with major policy moves. The German government changed its debt brake rule. This rule once kept the federal debt in strict limits. New rules let some defense and security spending go over the limit. Germany also started a €500 billion ($592 billion) fund for roads, energy systems, and climate plans. These steps aimed to push up the slow economic pace.

These moves were seen as a chance to turn around weak growth. After years of annual declines in 2023 and 2024, growth was expected to pick up in 2025. The latest data shows that Germany’s GDP barely rose by 0.3% in the first quarter of 2025 before it dropped by 0.3% in the second quarter.

Euro Zone Growth Remains Tepid

The rest of the euro zone seems to share Germany’s struggles. The region’s GDP grew by 0.6% in the first quarter of 2025, then slowed to 0.1% later. Martins Kazaks from the European Central Bank said this month that Germany plays a key role in the euro zone. Still, many experts now doubt the speed and size of its impact.

Spending Delays and Economic Impact

Holger Schmieding at Berenberg noted a rise in defense orders and new road and energy works. Yet, these sums have not come through in the nation’s output data. He said, “The actual spending moves slower than many of the more upbeat voices had thought. In Germany, it takes time to spend money.”

Franziska Palmas at Capital Economics saw more challenges below the surface of the new spending plan. She noted that, aside from more money on defense and roads, the government also uses extra funds for:
• Cuts in electricity tax for businesses
• Higher spending in pensions, healthcare, and social care driven by the aging population

Palmas made clear that while lowering taxes may spur some economic action, more spending on healthcare and pensions will mainly cover rising costs, not boost economic growth.

Modest Growth Expectations for 2026

Big German economic groups now predict a growth just above 1% for Germany in 2026. The European Central Bank sees the euro zone growing around 1% too. Schmieding of Berenberg thinks that Germany’s new spending will add about 0.3 percentage points to its growth. This should raise the euro zone figures by about 0.1 percentage point. Palmas expects a similar effect where Germany might lift euro zone growth by about 0.2 percentage points.

Other factors shape the euro zone’s growth. Recent cuts in interest rates by the ECB and strong performance in countries like Spain, which benefit from more immigration and jobs, help. Yet, factors like U.S. tariffs and tighter spending plans in France may hold back progress.

Broader Implications Beyond GDP

Even with a cautious view, many expect Germany’s slow but steady recovery to bring small gains to its neighbors. Schmieding noted, “Germany’s move from a short recession until mid-2024 to growth after late 2025 will give its neighbors a small boost. Germany remains an important trade partner.”

In summary, Germany’s bold fiscal changes have sparked hope, but the pace of spending and real growth numbers remain slow. Experts warn that 2026 may bring only a limited rise, amid a mix of spending challenges. Still, as Europe’s largest economy, Germany’s bounce-back will count for the overall health of the region.

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HOOPP CEO Calls for Strategic Investment in Canada’s Nation-Building Initiatives: A Step Towards Economic Growth

 

HOOPP CEO Sees Federal Projects as a Good Start, But More Work Is Needed

By Barbara Shecter | Published September 18, 2025

The federal government announced nation-building projects. HOOPP’s CEO, Annesley Wallace, spoke in Toronto and gave a cautious nod to the move. She sees these projects as a first step that can open up long-awaited investment options for big institutional investors.

Wallace stressed that Canada has rarely offered strong, nationally backed infrastructure chances that large pension funds or global investors find hard to ignore. She says the new projects are exciting. Yet she underlines that much work still lies ahead.

“Historically, we haven’t seen these kinds of opportunities with the national support we needed,” said Wallace. “So the recent news about the projects feels very promising.”

Pension funds naturally favor infrastructure investments because they tend to offer stable returns over long periods. Wallace added that Canada must design the projects with solid business models and the proper level of government help. Only then can the nation draw both local and global investment.

She mentioned, “There is a long way to go before we can move these projects forward. The new Major Projects Office may guide us through the next steps.” The office, launched on August 29, now works to speed up permits and join forces with provinces, territories, Indigenous groups, and private investors.

The first set of key projects, shared on September 11, includes a liquid natural gas facility in British Columbia and a nuclear power project in Ontario. These projects match the investment styles of large funds like HOOPP.

Wallace believes Canadian pension plans can boost the nation’s edge if they use strict investment rules. These rules ensure they can meet long-term pension promises. “We have funds at HOOPP that we would love to invest in Canada. This can power the economy and lift productivity,” she said. “Canada must show it is competitive to attract both local pension funds and global money.”

Wallace took charge of HOOPP in April 2025. Before that, she worked at TC Energy Corp and led infrastructure at OMERS. She also touched on global risks that affect pension investments. She noted that earlier trade tensions, especially under former President Donald Trump, complicated investment plans and raised economic worries. By late 2024, HOOPP had 27 percent of assets in U.S. markets.

She explained, “We have seen market links break and global alliances weaken. This has big economic and other effects.” To handle these changes, HOOPP now uses a clear total portfolio approach. This strategy helps the fund spot opportunities when the economy shifts.

“Looking at our whole fund sets us up for success no matter what happens,” she said. “Frequent economic cycles in the future could bring more opportunities if we are ready to act.”

As the government moves ahead with the Major Projects Office and speeds up key programs, the support from pension funds like HOOPP could help Canada reach its nation-building goals. This will work best if the projects balance clear commercial sense with effective public partnerships.

About HOOPP:
The Healthcare of Ontario Pension Plan is one of Canada’s largest pension funds. It provides retirement benefits for healthcare workers across Ontario. HOOPP is known for smart investment plans that include infrastructure, equities, and fixed income.

For more on Canada’s nation-building projects and the role of pension funds, stay tuned to Financial Post’s ongoing coverage.

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RBC’s Bold AI Gamble: Can Multibillion-Dollar Investments Transform Canada’s Banking Future?

RBC Bets Billions on AI: Will It Pay Off?

By Yvonne Lau | Published September 18, 2025

Canada’s largest company, the Royal Bank of Canada (RBC), bets billions on artificial intelligence (AI). The bank uses this bet to change its work and spark new growth. AI spreads through many fields. The financial services sector takes it in early. Yet, people now look for clear results. RBC must show that its large spending produces gains.

RBC’s Early AI Research

RBC began its AI work over ten years ago. Foteini Agrafioti started the project. She led Borealis AI Inc., the bank’s own research lab, from the start. Her love of machine learning grew during her PhD at the University of Toronto. In 2016, she launched Borealis AI. The bank let her team experiment with machine learning long before ChatGPT and similar tools appeared. She recalled, “Back then, AI was new, and we had room to learn without immediate need. The bank made a bold, early choice.”

Today, Borealis AI has about 950 data scientists and engineers. They study large sets of RBC’s financial data. Their goal is clear. They build new AI products to help the bank and improve customer service.

Ambitious Goals in a Changing Industry

The financial world uses AI fast, but doubts remain. Experts wonder if the current AI excitement will hold up. In response, RBC CEO Dave McKay sets high goals for AI work. He aims for up to $1 billion in extra revenue and cost savings by 2027. McKay stresses that RBC’s future depends on using data and AI well. The bank keeps spending around $5 billion each year on technology.

RBC: A World Leader in Bank AI

RBC’s effort shows. For the third year in a row, the bank ranks among the top three global financial firms for AI maturity. The Evident AI Index, a tool that checks innovation, research, patents, and skills in AI, confirms this. Toronto-Dominion Bank (TD) is the only other Canadian bank in the top ten worldwide. TD works closely with Toronto’s Vector Institute to build AI tools and grow talent.

Big Banks Face Hidden Hurdles

Being large does not make AI work simple. Alexandra Mousavizadeh, CEO of Evident Insights Ltd., explains that big banks have too many separate data pieces. “Big banks must move many pieces of data before AI can work smoothly,” she said. In this light, RBC’s early and steady investment in research and training at Borealis AI is key. Finance lecturer Jonathan Aikman at Queen’s University sees Borealis AI as the bridge that lets RBC turn raw data into useful insights and attract smart talent.

The Road Ahead

RBC speeds up its AI work as the industry watches. Many will note if the bank’s large spending gives it an edge and better service for customers. With Borealis AI inside and McKay’s bold money targets, RBC stands at the leading edge of banking’s digital shift. The road is not without risks. Yet the bank’s approach shows a strong belief in AI as a core part of future banking. The years ahead will show if this bet brings the rewards it promises and sets a guide for other banks in Canada and beyond.

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White House Supports Fed’s Prudent Rate Cut: Kevin Hassett’s Insights on Economic Strategy

Federal Reserve’s Quarter-Point Rate Cut Seen as a ‘Smart Move’ by White House Economic Advisor

September 18, 2025 — The Fed cut its borrowing rate by 0.25%. The White House sees the move as wise. White House advisor Kevin Hassett told CNBC on Thursday that the decision fits a careful style of managing the economy.

A Steady and Careful Move

The FOMC voted to drop rates by 25 basis points. Most members agreed. Some in the administration wanted a deeper cut. New Fed Governor Stephen Miran, known from the Council of Economic Advisers, pressed for a 50 basis-point cut. But the vote came out 11 to 1, and his view did not win.

Hassett said that the cut builds slow progress. He said policymakers will watch each new piece of data before they act again. On CNBC’s Squawk Box, he said:

“Moving kind of slow and steady and heading towards a target, watch the data come in, that’s what prudent policy is.”

He added that although Miran wanted a deeper cut, the 0.25% drop marks a sound start if further cuts are needed.

In the White House and Market

President Donald Trump, who picked Miran for the Fed, has not yet shared his view on this choice. In the past, Trump has been critical of the Fed and has pressed for faster and larger cuts. He even called Fed Chair Jerome Powell “Too Late” for a slow pace in meeting economic needs.

The president has asked for cuts up to 3 percentage points. His view stands apart from the latest FOMC plans. Trump often points to the slow U.S. housing market and the rising federal debt, which now nears $37 trillion.

Economic Prospects: Growth, Price Rise, and a Fine-Tuned Plan

Hassett pointed out that the Fed faces a tough task. The U.S. economy grew above 3% in the third quarter. Such growth usually makes a rate cut less likely. Yet, price rise stays above the 2% goal, although it shows signs of slowing down.

With mixed signals, Hassett said it makes sense for Fed members to look at all the models and listen to many views. He asked, “What can we do in an economy that is growing and has inflation slowing but still above target?”

Hassett called the 0.25% cut a careful balance—a move that shows hope without taking a big risk in pushing up prices.

Looking Ahead: Fed Chair Hints

Some see Kevin Hassett as a strong choice to take over from Jerome Powell next year. His words show a preference for a plan built on clear data and many opinions on the economy.

Summary of Key Points:

  • The Fed dropped its main rate by 0.25% as a careful measure.
  • White House advisor Kevin Hassett called the move smart.
  • Fed Governor Stephen Miran had asked for a 0.50% drop, but most members disagreed.
  • President Trump has often pushed for deeper cuts, though he did not comment on this move.
  • The U.S. economy grew over 3% even as inflation stayed above 2%.
  • Hassett stressed the need to view multiple data points and ideas.
  • Hassett is seen as a likely candidate for Fed Chair next year.

For more news on economic changes and the Fed’s plans, follow CNBC’s live updates and expert chats.

Watch the full interview with Kevin Hassett on CNBC’s Squawk Box for more in-depth details.

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Unlocking Economic Potential: How OSFI’s Relaxation of Lending Rules Could Propel Canadian Banks to Lend $1 Trillion

Canada’s Banking Regulator Explores Measures to Boost Business Lending Amid U.S. Trade War

By Barbara Shecter | Financial Post | September 17, 2025

Canada’s federal banking regulator, OSFI, considers new rules. OSFI wants Canada’s biggest banks to lend more to businesses. Canada faces economic challenges. A trade war with the U.S. makes change urgent.

Banks Could Potentially Lend an Additional $1 Trillion

Peter Routledge, OSFI’s head, spoke at a recent event. He noted that major banks built strong capital buffers during hard times. They earned these buffers during COVID-19 and after the 2023 Silicon Valley Bank collapse. Banks keep these buffers so they can lend more money. Routledge said banks could offer nearly $1 trillion in new loans. They would still meet capital rules. Compared to Canada’s $3-trillion economy, this sum is large. Routledge sees a chance to fund the country’s economic shift.

Potential Focus on Public-Private Infrastructure Projects

OSFI has not set final rules. One idea eases capital requirements on many business loans. These loans would support public-private projects. OSFI has taken similar steps before. In July, it lowered capital rules for life insurers investing in infrastructure. This idea fits a broader push to back key projects.

Leveraging System Resilience as a Catalyst for Growth

Routledge stressed the strength of Canada’s banking system. He pointed out that the system grew resilient after the 2008 crisis. The banks’ strong buffers can do more than protect. They can help fuel growth. Routledge asked banks to share ideas that boost lending without risky moves. He sees the system’s strength as a tool for supporting businesses and households. He stressed that well-run banks help keep credit and financial services available.

Trade War and Economic Adaptation

Canada faces a long-running trade dispute with the U.S. The Canada-U.S.-Mexico Agreement is up for review in July 2026. The U.S. Trade Representative has already started looking at the deal. Some expect the U.S. to press Canada for major changes. Despite these issues, Routledge stayed cautiously hopeful. He said the system’s strength might soften a tough trade outcome. He hoped for “maximum benefits and minimal costs” in negotiations. He added that Canada’s banks are ready to adjust when needed.

Canada’s Robust Financial System

Routledge pointed out that Canada’s financial system is more resilient than many others. He compared it to the U.S. system, where bank failures happen more often. He felt relief that shocks like the Silicon Valley Bank collapse in 2023 hurt the system only slightly. He admitted that future shocks are possible. OSFI works to keep the system both stable and flexible.

Government and Industry Outlook

Federal efforts are also in play. Ottawa launched a $5-billion fund to help businesses face trade war shifts. Together, government action and OSFI’s possible new rules form a two-pronged plan. This plan aims to boost resilience and get more business investments. As OSFI reviews its ideas, banks, businesses, and policymakers will watch closely. They want capital rules that balance risk with the need for more lending.

For continued updates on this story and more on Canada’s financial and economic news, subscribe to Financial Post.

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Major Banks Lower Prime Rate to 4.70%: What It Means for Canadians Following Central Bank’s Cut

Canadian Banks Lower Prime Rate to 4.70%, Following Bank of Canada Rate Cut

September 17, 2025 – The Bank of Canada cuts its main rate. In response, Canadian banks lower their prime rate. They set it at 4.70% starting September 18. This rate drops 25 basis points from 4.95%. The change follows a quarter-point cut by the central bank to 2.5%.
• Banks act after the Bank of Canada signals a softer monetary plan.
• Royal Bank of Canada, Toronto-Dominion Bank, Canadian Imperial Bank of Commerce, Bank of Montreal, Desjardins Group, National Bank of Canada, Laurentian Bank of Canada, Equitable Bank, and Bank of Nova Scotia agree with the move.

Impact of the Rate Cut

The prime rate guides many loans across Canada. It affects mortgage rates, personal loans, credit cards, and other variable-interest deals. Lowering the rate to 4.70% should ease borrowing costs. Consumers and businesses with variable loans may find relief in tighter conditions.
Analysts view this change as a quick fix for slowing inflation and steady economic growth. Banks and the central bank work together to boost spending and investments.

What Borrowers Should Know

Variable-rate borrowers will see lower charges soon. Homeowners with variable mortgages might pay less each month if their lender passes on the cut.
New borrowers may soon get better loan terms. Experts advise that borrowers watch future monetary moves. Banks may change rates again if economic data shifts.

Conclusion

Canada’s major banks now lower the prime rate. Their decision follows the Bank of Canada’s rate cut. This step shows a clear link between central bank actions and commercial lending. The goal is to ease credit and support the economy amid current challenges.

For more in-depth coverage and analysis, readers are encouraged to subscribe to the Financial Post, which provides ongoing updates on economic policy, market trends, and financial news across Canada.

Photo credit: Wikimedia Commons – Bank buildings in Toronto’s Financial District

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Heavy Truck Sales Plummet: Is the U.S. Economy Heading for a Recession?

Heavy Truck Sales Plunge—Is the U.S. Heading Toward a Recession?

September 17, 2025 — New data shows U.S. heavy truck sales fall fast. The U.S. Bureau of Economic Analysis reports that trucks weighing over 14,000 pounds now sell at levels unseen in four years.

Steep Decline in Heavy Truck Sales

In August 2025, truck sales dropped by over 15% from last year and by 21% compared with August 2023. This steep fall pulls worry from both economists and investors. Heavy trucks like tractor-trailers act as signs of industry strength. When truck demand grows, the manufacturing and construction scenes gain. When sales fall, the economy may slow down and enter a recession phase.

Historical Context and Economic Implications

Joe Brusuelas, chief economist at RSM, calls the trend important. He writes that the drop began in 2023 and needs a close look by policymakers.

  • During the Global Financial Crisis, truck sales dropped by more than 67% from their 2006 peak to the 2009 low.
  • In the early 2000s, as the dot-com burst hit, sales fell nearly 50% from late 1999 until 2002. These past numbers show a strong link between truck sales and overall economic work. Lower truck sales can come before a recession.

Is This a Traditional Signal or Something New?

Not all experts agree that lower truck sales clearly signal a coming recession. Paul Hickey, co-founder of Bespoke Investment Group, points out that the drop marks a slowdown in manufacturing. He also sees that today’s economy may work in different ways.

Hickey notes that while truck sales fall, the U.S. economy still grows. He sees a shift from manufacturing work toward more service and digital work. Many businesses now use online methods and technology as much as they rely on heavy industry.

As Hickey states, "Falling sales are often a recession indicator. The key word is often." His view reminds us that truck sales once gave a clear picture of the economy. New tech, like artificial intelligence and digital work, may change this picture.

What Lies Ahead?

Even after this drop, truck sales had returned near their peak after the pandemic. This makes the current fall stand out and may point to wider issues in the economy.

Investors and lawmakers now watch the next economic data. They want to know if this drop will pass or grow into a bigger issue.

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