With Thursday’s deadline for a resolution fast approaching, Canadian investors are naturally concerned about the drama down south.
However, Robert Hogue, senior economist with Royal Bank of Canada, tells CREW he believes the issue will be resolved “with minimal harm to the U.S. market.”
“Based on the assumption of sanity on behalf of the policymakers, we believe that at the end of the day it will be resolved,” he says. “We expect the Canadian economy to grow moderately in 2014, with the market benefitting from stronger growth in the U.S.”
Hogue highlights growth in the U.S. housing and automotive industry as instrumental to Canada’s future economic growth. Still, his forecast for a speedy resolution to the Congressional standoff is what investors are most interested in as they brace for a potential
Offering predictions about Canada’s own housing market, Hogue says he expects conditions to remain strong with sales only weakening at the end of the year (2014).
“Interest rates will naturally be the main factor for the market in 2014,” he says. “We are expecting Bank of Canada to increase the rate at the start of the second half of the year by 50 basis points.”
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