DUCA Deposit Rate Decrease to 5.5% on January 17, 2024 | Page 2 | DUCA Credit Union | Discussion forum

smayer97 said
Premature to tell... that is weeks away and anything can happen in the bond market. But days or a bit more ahead, you can easily tell if they are likely to adjust the rate, and even by how much. I have been doing it for over 2 years now with no surprise...ever since this was pointed out in a financial service I follow.

Typically, if the bond rate is consistently more than 25pts away from the BoC rate, they change it, plain and simple. Check it out for yourself. It holds true for CA and US 100% over decades. I know keep a live chart handy, with both US and CA 2- and 6-month bonds vs the central bank rates, and can see where the market is going.  

You should start separate forum topic for your BoC rate change forecasts. This could be useful information for many people. Consider it public service. Thanks.

P.P.S... just to be clear... another way to put this is that the Feds ALWAYS FOLLOW the bond market... they NEVER lead it! (they might slightly overshoot, on the odd occasion, BUT they NEVER lead it).

smayer97 said
SO SO WRONG!!! The BoC rates are NOT based on inflation rates AT ALL!! They are 100% following the short term bond market rate. not 97, 98, or even 99% of the time. 100% of the time! Check it out yourself.... just pull up a chart and you will see that ALL rate changes stay within a 25pt range of the bond market, and it always lags! You can easily predict rate changes by following the short term bond market.

All central banks try to give the impression that they are in control... such smoke and mirrors!  

Oh, so now you are a believer!...that the BoC is always a "follower" of the Financial markets (bonds, gic's, etc). Didn't seem so in your January 2024 posts in the "End of an Era" topic. Good for you.

savemoresaveoften said
CB always lead the market by telling u what they r going to do 3-6 months in advance. Try running that correlation instead….

Also watch interest rate futures contract if one knows what those are.
The implied probability of interest rate changes every time the CB opens their mouth. It is crystal clear who’s leading who too.  

Talking heads may try to influence the market with their forward-looking projections and these sometimes have short term impacts BUT they never have a trending impact. So looking at the implied prob. is not a good indicator of the direction of the bond market. This can easily be seen, that there is no meaningful correlation.