, lowering the policy range to 3.5%–3.75%. This comes at a fragile time for the central bank with members split, with some worried about labour-market weakness while others are concerned that further easing could fuel inflation. This tension has given rise to expectations of a hawkish cut, where the Fed lowers rates but signals it may pause afterward. We’ll get some insight into that from Powell’s press conference and the updated dot plot. Mixed economic data, including slowing hiring and inflation stuck at 2.8% has made the decision hard, and more dissents are expected as policymakers debate risks from tariffs and elevated price pressures.
While it’s looking like the Fed will cut rates today, the BoC is widely expected to hold interest rates at 2.25%. This comes as recent data shows the Canadian economy and labour market stabilizing after the initial U.S. tariff shock, with GDP, inflation, and employment all outperforming expectations. It was fun while it lasted, but it looks like the rate-cut cycle has ended, with economists forecasting no further moves any time soon, though policymakers are still expected to pay close attention to risks tied to U.S. trade policy and ongoing weakness in domestic demand. Upward revisions to GDP suggest the economy’s output gap has narrowed, even as household consumption softens and business investment stalls in heavily tariff-affected sectors like steel, autos, and lumber.
Speaking of trade tensions. Canada is back in Trump’s crosshairs, after Trump warned that Canadian fertilizer, particularly potash, which U.S. farmers heavily depend on, could face steep tariffs as his administration seeks to boost domestic production and support farmers hurt by trade tensions. The threat revived concerns among agricultural groups after earlier tariffs caused fertilizer prices to spike, hurting growers in both countries. Industry experts emphasize that the U.S. has limited potash resources and relies primarily on Canada, while the only other major global suppliers are Russia and Belarus. They warn that new tariffs would raise farmers’ costs and disrupt supply chains with little benefit, even as broader U.S.–Canada trade negotiations remain stalled.
Will the flood gates open? The potential IPO of SpaceX, valued privately between $800 bln and $1.5 tln, could reopen the door for as much as $2.9 tln in long-stalled mega-listings from other centicorns (companies worth over $100 bln) like Stripe and ByteDance. This could potentially end years of sluggish IPO activity and help bridge the gap between private and public valuations. Investors and bankers expect a SpaceX listing to trigger a wave of large public offerings despite questions about lofty valuations (and the bad press Elon has gotten this year). And while these huge IPOs may trigger FOMO from other firms looking to go public, once they become public they would risk more scrutiny from investors if they do not hit their aggressive growth targets.
Hot or cold? Hard to tell. Job openings in the U.S. ticked up to 7.67 million in October, the highest in five months, but the labour market showed clearer signs of cooling as layoffs climbed to 1.85 million, the most since early 2023, and hiring fell significantly. The gains in vacancies were concentrated in just a few sectors such as retail, wholesale trade, and health care, while layoffs were driven largely by food services. Economists say the data reflects a labour market that is slowing but not deteriorating, with quits falling to their lowest level since 2020 and employers adjusting to higher costs and trade-related uncertainty. Despite questions about the reliability of JOLTS data, markets still expect the Fed to cut rates by 25 bps today, with analysts noting the labour market is not currently a source of inflationary pressure.
The November NFIB Small Business Optimism Index rose to 99.0, slightly above its long-term average, but its underlying components showed no convincing signs of a growth or labour-market rebound. Expectations fell to their lowest since April 2025, capex intentions slipped, and hiring plans improved only slightly, following the trend that has been happening since 2022. Labour data remained mixed, with firms still struggling to find workers, yet actual compensation barely moved. Additionally, inflation indicators showed more firms raising prices even as price-setting plans stayed flat. Overall, the survey signals a blend of weak demand and lingering labour constraints, aligning with other jobs data that we’ve seen.
Australia has become the first democratic country to enforce a nationwide social media ban for users under 16, affecting platforms including TikTok, Instagram, Snapchat, YouTube, and Reddit, with fines up to $49.5 mln for noncompliance (for the platforms and not the kids). The law comes into effect today and aims to protect minors from online harms, including cyberbullying and toxic content, and has already sparked global attention, prompting other countries like Indonesia, Denmark, Brazil, and New Zealand to consider similar measures.
Diversion: Bested
