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Wall Street widely expected the Federal Reserve to raise interest rates by 25 basis points, which is exactly what happened. But equity investors debated conflicting messages: the policy guidance shifted from “ongoing” rate increases to “some additional” policy firming, though Chair Jerome Powell said that the Fed’s hands aren’t tied.
Stocks gained in the immediate aftermath and then sank. Treasuries and the dollar fell. Investors pouring over the Fed’s Summary of Economic Projections didn’t get much help there, since the Fed’s expectations for unemployment and inflation were little changed.
While Chair Powell said in his news conference that the policymakers had weighed a pause in rate hikes ahead of their meeting, the Fed remained focused on the risks of high inflation even as it watched developments in the banking system. “If we need to raise rates higher, we will,” he said.
“This is about as hawkish as the Fed can be given the banking sector stresses that are ongoing,” said Win Thin, global head of currency strategy at BBH. “To me, the statement is similar to what the ECB said. That is, once we get past the banking sector stresses, the tightening cycle likely remains intact.”
Here’s what others on Wall Street had to say:
Sonia Meskin, head of US macro at BNY Mellon:
“This is slightly hawkish, yes, though the market so far appears to give it a dovish read, which possibly makes sense given that Powell’s most recent pronouncement before the blackout period opened the door to a 50 bps hike and a more material tightening that the March SEP actually reflects.”
Joe Gilbert, portfolio manager at Integrity Asset Management:
“Powell is trying to have it both ways. He is trying to appease both the hawks and the doves. This ultimately may be the last rate hike this year but Powell has to make the market believe that it isn’t because that would loosen financial conditions too much. The softening to come in the economy from the banking collapses has yet to be felt and the Fed knows this but they can not be alarmists.”
Seema Shah, chief global strategist at Principal Asset Management:
“The past roller coaster month has seen Powell go from dovish, to hawkish, and presumably back to dovish, with market expectations following this volatile ride. Policymakers will be desperately hopeful that inflation plays ball and the deceleration trend reasserts itself soon, validating today’s decision. If not, April and May could be potentially even more exhausting months.”
Matthew Hornbach, global head of macro strategy at Morgan Stanley, on Bloomberg TV:
“What strikes me is how they have balanced financial stability concerns against concerns about sticky inflation. The way they have done it is they have told us they are going to hike less but cut later. That seems like a pretty rational decision. I think the market should feel comfortable. The bond market is going to have a very difficult time taking out these rate cuts that are priced in through the balance of this year.”
Scott Ladner, chief investment officer at Horizon Investments:
“For as much consternation as there was about how the dots might change and the probable hike, this is a pretty on-the-screws event. They hiked the predicted 25bps, didn’t really change anything meaningful in the dots or SEP, and just lightly acknowledged that the banking stresses over the past two weeks may impact credit creation and therefor economic growth.”
Oscar Munoz, US Macro strategist at TD Securities:
“The SEP growth and UE rate projections were kept basically the same. That’s despite having a UE rate at 3.6 per cent now and Q1 growth running fairly strong in Q1. This means that they’re clearly expecting significant slowing before the end of the year and into 2024.”
Omair Sharif, founder of Inflation Insights:
“You’d only need two people to move up from 5.125 per cent for a half-hike and three to move up to get another full 25 bps. That doesn’t seem like a high bar given that we’ve got a long way to year-end and if the banking stress resolves soon enough, they may revert back to focusing more closely on inflation.”
“Add in the fact that the statement indicated that ‘some additional policy firming may be appropriate’ and I don’t think you want to bank on the fact that 5.1 per cent will be the terminal rate.”
Vincent Reinhart, chief economist at Dreyfus and Mellon:
“The basic question is should you deflect the path of policy from design purely for maximum employment and stable prices because of a concern about stability risks. Right now, I think Chair Powell isn’t accepting that as an argument, and really is adopting what I’ve always called the ‘separation principle,’ which is if you do banking supervision, regulation and crisis management, you have a freehanded monetary policy.”
Alberta’s minister of forestry and parks said the RCMP national security investigation team is involved in a probe looking into what caused a pipeline to rupture and catch fire west of Edmonton earlier this week.
On Tuesday, a wildfire was sparked following a natural gas pipeline rupture about 40 kilometres northwest of Edson, Alta. The fire has since been deemed under control.
“We have no indication of any kind of cause on that fire yet; the investigation is happening,” Forestry and Parks Minister Todd Loewen said at a wildfire-related news conference Thursday morning. “The national security investigation team of the RCMP are investigating the cause.
“My understanding, since the cause was unknown, that’s standard practice for them to come in on anything that’s unknown.”
RCMP said as of Tuesday, initial reports had shown no signs of foul play.
Global News has reached out to the RCMP for more information. On its website, the RCMP states it has a wide range of national security-related mandates and responsibilities. It says its national security criminal investigations program involves critical infrastructure protection and critical incident management.
Officials say the investigation into what caused the TC Energy pipeline to break could take months or even years.
The Canada Energy Regulator had investigators on site on Wednesday. The Transportation Safety Board of Canada is also investigating the incident.
The rupture sparked a blaze that could be seen for kilometres, sending large flames and plumes of smoke into the air.
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No injuries were reported, and officials said the fire was never a threat to any surrounding communities.
“I want to commend the Yellowhead County Fire Department, industry and our wildfire team for the timely manner that this fire was brought under control,” Loewen said Thursday.
“Fast information sharing between all parties facilitated an effective wildfire response.”
The wildfire sparked by the pipeline rupture is located about 28 kilometres northeast of Obed Lake. More than 30 firefighters were expected to be in the area Thursday to continue working on the wildfire.
— with files from The Canadian Press
— more to come…
© 2024 Global News, a division of Corus Entertainment Inc.
A St. John’s woman says she won’t be paying many more visits to Tim Hortons, after an email from the coffee chain led her to believe that she’d won a new boat — when she hadn’t won anything at all.
“I go to Tim’s quite a lot, seven days a week. I’m afraid now that’s going to change to no days a week,” Carol Evans told CBC News on Thursday.
Evans said she received an email from Tim Hortons on Wednesday afternoon while on a break from her work as an licensed practical nurse.
The email recapped the prizes she’d won in the annual Roll Up the Rim to Win contest, but there was one extra prize included — a brand new boat and trailer, valued at about $55,000.
Unfortunately, the excitement was over by the time she got home from work.
“I was just so excited, really excited. I thought I really won a boat and a trailer, $55,000 worth, and to find out at five to six, I had an email from them come in telling me it was a technical error,” she said.
“I don’t get my boat and I don’t get my trailer.”
Carol Evans of St. John’s was elated when she got an email from Tim Hortons saying she won $55,000 worth of prizes. Another email from the coffee giant a few hours later, telling her it was an error, had her crushed — and fuming.
Evans said her win was the talk of her co-workers.
“I work with about a hundred people in the run of a day, and more than that outside the OR, and everybody was so happy for me. They couldn’t believe it, I finally won something in my life,” she said.
“But to find out a few hours later I didn’t, it was disappointing, very disappointing.… I cried, it was so sad.”
Although she may not have taken it out on the water, Evans said winning would have meant a lot to her, like helping fund her retirement after more than five decades in nursing.
“I could have sold the boat and trailer and had some money, paid off some bills, probably could have, who knows, retired after 55 years of work,” she said.
In an emailed statement to CBC News on Thursday, Tim Hortons said the message was meant to show what each customer won over the course of the contest — and the boat was included by mistake.
“We developed a Roll Up To Win recap email message with the best intentions of giving our guests a fun overview of their 2024 play history.
“Unfortunately there was a human error that resulted in some guests receiving some incorrect information in their recap message.”
The company didn’t disclose how many people across the country received the email, but CBC News spoke to another person in western Newfoundland who got it.
Others in Edmonton, Hamilton and Brampton, Ont., were also told they’d won the boat.
By Wednesday afternoon, a Facebook group had formed with more than 200 people expressing outrage about the mistake and threatening to file lawsuits.
Tim Hortons sent the affected customers a letter, telling them to disregard that winning email and that it was sent as a result of “technical errors.”
“Unfortunately, some prizes that you did not win may have been included in the recap email you received. If this was the case, today’s email does not mean that you won those prizes,” the letter read.
“We apologize for the frustration this has caused and for not living up to our high standards.”
It’s a familiar story for Tim’s, however, as last year, its app mistakenly informed users they’d won $10,000.
Evans said two years of big mistakes just isn’t fair. She’d like to see Tim Hortons move away from the Roll Up to Win smartphone app and back to paper cups.
“It’s not fair to the public who spend their hard-earned money to go into Tim’s and buy their coffee every day, buy their lunch, and then think they won a prize and all of a sudden you learn, three hours later, you didn’t win a prize, and it’s not fair.”
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The new regulations will take effect in Bowen Island, Tofino, Pemberton and 14 other communities on Nov. 1
Published Apr 18, 2024 • Last updated 2 hours ago • 5 minute read
With less than two weeks before B.C.’s short-term rental restrictions take effect, visitors staying at an Airbnb, Vrbo or other short-term rental homes are told to check with their hosts to make sure they are not staying in illegal accommodations.
Guests should ask hosts if they are compliant with the new rules, said B.C.’s housing minister, even as he reassured guests they won’t be on the hook.
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“The responsibility to comply with the rules fall with the hosts and the short-term rental platforms,” said Ravi Kahlon at a news conference with Premier David Eby in Langley on Thursday. “We encourage people to continue to explore beautiful British Columbia, and stay in legal short-term rental accommodations.”The new regulations set to take effect on May 1 would restrict short-term rentals to principal residences and either a secondary suite or a laneway home/garden suite on the property.
They apply to more than 60 B.C. communities with populations of more than 10,000 people, as well as 17 smaller communities, including Bowen Island, Tofino, Osoyoos, Pemberton, and Gabriola Island, which have decided to opt in. For these communities, the rules will take effect on Nov. 1.
The new legislation carries penalties of $500 to $5,000 a day per infraction for hosts and reach as high as $10,000 a day for platforms.
Eby said the province’s principal residence requirement is meant to crack down on speculators while allowing homeowners to rent out spaces in their principal residences if they choose to do so.
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He acknowledged the restrictions could put some property owners’ investment and retirement plans into disarray, but made no apologies, saying people with money to invest should put their money elsewhere.
“Do not compete with individuals and families who are looking for place to live with your investment dollars,” Eby said, adding the government will “tilt the deck every single time toward that family.”
The government has set up a provincial enforcement unit, currently staffed by four people, to conduct investigations into alleged non-compliant units.
The enforcement will be largely done digitally and includes the use of a short-term rental data portal that’ll help local governments monitor and enforce regulations.
Municipalities with their own short-term rental restrictions can upload non-compliant properties to the portal, said Kahlon. Platforms will have five days to verify whether the units are on their sites. Local governments without short-term rental licensing can report properties they believe are not compliant.
The platforms will be required to remove non-compliant listings at the request of local or the provincial governments and provide the province with a monthly update of short-term listings on their sites, said Kahlon.
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Companies such as Expedia and Booking.com are working to get ready for the new rules, and he’s hopeful other platforms will follow suit by May 1.
Airbnb said it has been in discussions with the provincial government for months and plans to comply with the new rules, but predicts they will harm the province’s tourism sector by taking extra income away from residents and limiting accommodation options for people, while doing little to improve the housing crunch for residents.
“They’re doing this because they say there’s going to be an impact on housing, that this will free up more housing for people,” said Nathan Rotman, Airbnb’s policy lead in Canada. “That is just not true.”
Despite several years of Airbnb restrictions in Vancouver, for example, rents have gone up while vacancies stayed low, he said.
Kahlon said the pending rules are already having a positive impact on housing availability with short-term rentals being converted to long-term use or being put up for sale.
In March, more than 19,000 entire homes in B.C. were listed as short-term rentals for most of the year, said the province. Even if half of those units are returned to the long-term market, that’ll make a “substantial difference” in communities, said Kahlon.
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Eby said there has been a “massive upswing” in hotel construction in key tourist areas as an unintended result of the new policies.
Bowen Island, a small community of 4,200 whose council voted in March to opt into the province’s short-term rental regulations, has seen increased pressure from tourists and housing demand in recent years.
The decision was council’s way “to balance what is appropriate use in residentially-zoned neighbourhoods while still allowing property owners to still do what they want with their properties,” said Mayor Andrew Leonard.
The principal residence requirement still allows for Airbnb and other short-term rentals on the island, he pointed out. “The vast majority of short-term rental operations are unaffected. This just keeps it in the homes of homeowners instead of speculators.”
Some communities, including Parksville’s Resort Drive area, were granted an exemption last month under the province’s exemption for strata hotel or motels. The area was purpose-built as tourism accommodation more than two decades ago.
The new legislation is being challenged in B.C. Supreme Court by Victoria-based groups and the Westcoast Association for Property Rights, who are calling for a review of the new rules and compensation for financial losses.
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According to Airbnb, Airbnb bookings and related spending generated around $2.5 billion in B.C. in 2023 and created 25,000 jobs.
The company says that for every $100 spent on an Airbnb booking, guests also spent about $229 on other travel spending.
More than three quarters of hosts polled by the company say they use their Airbnb earnings to cover rising costs of living, especially housing.
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