Briefly:

(October 29, 2008) The U.S. Federal Reserve has cut interest rates by 50 basis points, lowering the trend-setting federal funds rate to 1%. The discount rate now stands at 1.25%.

“The pace of economic activity appears to have slowed markedly, owing importantly to a decline in consumer expenditures,” the Federal Open Market Committee said in its statement. “Business equipment spending and industrial production have weakened in recent months, and slowing economic activity in many foreign economies is damping the prospects for U.S. exports. Moreover, the intensification of financial market turmoil is likely to exert additional restraint on spending, partly by further reducing the ability of households and businesses to obtain credit.”

The slowing economy has already knocked the legs out from under many commodities, thus reducing the threat of inflation.

Canadians’ housing attitudes steady

(October 29, 2008) Despite the gloom hanging over the U.S. housing market, Canadians have not changed their minds when it comes to their home buying intentions, according to a survey by RBC.

Twenty-two percent say they are considering buying a home in the next two years, marking no change since January 2008.

“We’ve noted that Canadians still believe a home is a good investment, and many are continuing with their home improvement plans,” remarked Catherine Adams, RBC Royal Bank’s vice-president, home equity financing.

Renovations remain popular as well, with 70% of respondents planning to spruce up the old homestead within the next two years.

(10/29/08)

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.