• Global economic momentum gained a step relative to expectations but, even so, the Bank of Canada ("BoC") and European Central Bank ("ECB") began rate-cut cycles; the first G7 central banks to do so.
• In the U.S, economic growth this year is expected to nearly match 2023’s pace, at 2.4%. However, this is partly due to a very strong 4% hand-off in the second half of 2023, which has boosted the 2024 average. By the end of this year, U.S. growth is expected to slow to 1.7% on a Q4 over Q4 basis, as the longevity of higher interest rates create more weight under the normalization of savings and job markets.
• Eurozone growth has surprised to the upside in early 2024, albeit from low expectations. Nonetheless, forecast revisions are now leaning toward upgrades, as the prospect of lower interest rates creates some optimism that a floor can be maintained under economic momentum. However, the risk of an uptick in inflation from geopolitical tensions or solid domestic labour markets remains ever-present.
• The Canadian economy should benefit from interest rate relief, but overall economic momentum is forecast to remain subdued as indebted consumers continue to adjust. Consumer spending is expected to cool even though the BoC has started to cut interest rates, as borrowing costs remain higher than the COVID-19 pandemic lows. Additionally, a softening labour market is expected to weigh on the pace of consumer spending.
• China exceeded forecasters’ economic expectations in the quarter, leading to an upgrade to 2024 gross domestic product (GDP). With a 5% growth target almost assured, there is doubt that the government will provide more stimulus to the economy. Ultimately, China’s aging demographics and restructuring of the economic drivers will maintain a slowing growth trajectory as the years progress.

For access to TDAM's full update, please check out the Q3 Market Perspectives.

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