Key Takeaways
- Boeing (BA) and the International Association of Machinists (IAM) union have agreed to resume mediation on Monday, aiming to resolve a strike involving approximately 3,200 members in the St. Louis area.
- Bank of Canada (BoC) Governor Tiff Macklem anticipates "soft" economic growth below potential, stating the central bank will put more emphasis on risks for its next rate announcement amidst elevated uncertainty.
- The US government has paused over $11 billion in funds for "lower-priority projects" managed by the Army Corps of Engineers, including those in New York and San Francisco, due to an ongoing government shutdown.
- Global current account imbalances are widening again, reversing a trend observed since the global financial crisis and indicating a potential structural shift in the world economy.
- Canada's consumption growth is expected to moderate from Q2 but remain positive, while exports are not projected for a rapid rebound, according to BoC Governor Macklem.
Boeing and IAM Union to Resume Mediation
Boeing (BA) and International Association of Machinists (IAM) District 837 have accepted an offer from the Federal Mediation and Conciliation Service (FMCS) to resume mediation talks on Monday, October 20, 2025. This critical development comes as the union's approximately 3,200 members in the St. Louis area approach their 12th week on strike, impacting the production of military aircraft and defense systems. The union expressed hope that returning to mediation will lead to meaningful progress and a fair resolution. Previous mediation attempts had failed, with the union rejecting Boeing's re-extended offer and pushing for its own proposal.
Bank of Canada's Cautious Economic Outlook
Bank of Canada (BoC) Governor Tiff Macklem provided a cautious assessment of the Canadian economy, stating that he expects growth to resume but to be soft and likely a little below potential growth in the near term. Macklem indicated that the BoC is placing more emphasis on risks when considering its next interest rate announcement, scheduled for the end of the month. He acknowledged that while there is less uncertainty than earlier in the year, it remains elevated, and the central bank will need to be humble about its forecasts as it returns to formal economic forecasting.
The Governor also noted that consumption growth is expected to moderate from the second quarter but is still anticipated to be positive. Regarding international trade, Macklem stated that he is not expecting a big further decline in exports, nor a rapid rebound. These remarks suggest a sustained period of modest economic expansion for Canada.
US Government Pauses $11 Billion in Projects
The US government has announced a pause on over $11 billion in funds for "lower-priority projects" overseen by the Army Corps of Engineers. This action is attributed to an ongoing "Democrat shutdown," which, according to Office of Management and Budget Director Russ Vought, has drained the Corps' ability to manage billions of dollars in projects. Projects in major cities, including New York, San Francisco, Boston, and Baltimore, are among those being immediately paused and considered for cancellation. The government shutdown began on October 1, and there is currently no clear timeline for its resolution.
Widening Global Imbalances Noted
Reports from the International Monetary Fund (IMF) indicate that global current account balances are widening again, reversing a narrowing trend that had been in place since the 2008-2009 global financial crisis. This widening amounted to a sizable 0.6 percentage points of world GDP in 2024. The IMF's assessment for 2024 shows that about two-thirds of this widening is considered excessive, driven primarily by China's widening trade surpluses and US trade deficits. This reversal may signal a significant structural shift in the global economy and highlights the need for concerted adjustment in domestic macroeconomic policies to avoid potential risks to financial stability.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.