TD Bank Group Sees Global Economy Slows In 2024; TD Economics Predicts Gradual Interest Rate Cuts Amid Cooling Inflation, Geopolitical Risks Persist. U.S. Experiences Soft Landing With 4.1% Unemployment And Fed Rate Cut To 3.25-3.50% By End Of 2025. Canada Sees Growth Boost From Population Gains, BoC Cuts Rates To 2.25-2.50% In 2025. Canadian Dollar Expected To Trade At $0.71-$0.73 U.S. Cents.

ECONOMIC SUMMARY AND OUTLOOK

The global economy remains on track for a modest slowdown in calendar 2024, as high interest rates continue to weigh on growth. Alongside slower growth, inflation across the G-7 has cooled, and central banks have started to lower interest rates. TD Economics expects future interest rate reductions to be gradual, as central banks assess how growth and inflation respond. In addition, the evolution of geopolitical risks maintains a degree of uncertainty on both the economic outlook and the inflation trajectory.

The U.S. economy has continued to grow at a solid pace in calendar 2024 supported by resilient consumer spending and strength in business investment. High borrowing costs have curtailed residential investment, which has weighed on overall growth. With U.S. domestic demand outpacing many of its advanced economy peers, import growth has also run ahead of exports, leading to little support to growth from international trade.