BMO Equity Research IN Tune Markets Plus: What’s Next in Economics, Markets and Trade
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Oct 6, 2025 In this insightful discussion, Doug Porter, Chief Economist at BMO, shares his perspectives on GDP and inflation trends in the U.S. and Canada. Ernie Tedeschi, Yale’s Director of Economics, contrasts robust GDP growth with concerns about labor market dynamics and rising tariffs. Dan Phillips, BMO’s CIO, emphasizes a tactical investment approach amid evolving market risks, including the impact of AI and automation. The trio also explores the resilience of the Canadian economy and why government shutdowns typically leave markets unfazed.
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Fed Shifts Toward Easing
- The Fed sees less inflation risk but more labor weakness, which tilts policy toward easing.
- Doug Porter expects two cuts in 2025 and gradual further cuts into 2026 toward slightly below neutral.
Canada Likely To See More Rate Cuts
- Bank of Canada has already cut and likely will cut further toward a 2% policy rate.
- Doug Porter sees two more cuts and timing depending on upcoming inflation and employment data.
High-Productivity US Expansion
- The US shows strong GDP and private AI investment but slowing job growth and rising unemployment.
- Ernie Tedeschi calls this a high-productivity expansion with output up but labor growth weak.