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Email this7:04 am
March 30, 2017
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New O/N rate: 4.25%
The below is the last paragraph in the release, sign of potential pause/done as its a more dovish statement than the last few we saw.
Looking ahead, Governing Council will be considering whether the policy interest rate needs to rise further to bring supply and demand back into balance and return inflation to target. Governing Council continues to assess how tighter monetary policy is working to slow demand, how supply challenges are resolving, and how inflation and inflation expectations are responding. Quantitative tightening is complementing increases in the policy rate. We are resolute in our commitment to achieving the 2% inflation target and restoring price stability for Canadians.
7:27 am
January 28, 2015
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Who will be the first to raise rates??
7:36 am
October 11, 2015
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Oaken raised their rates yesterday (Dec 6), before the BOC announcement.
8:05 am
September 7, 2018
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savemoresaveoften said
New O/N rate: 4.25%The below is the last paragraph in the release, sign of potential pause/done as it’s a more dovish statement than the last few we saw.
“ We are resolute in our commitment to achieving the 2% inflation target and restoring price stability for Canadians.”
So BoC is resolute in achieving the 2% inflation target. Good luck! I was in the grocery store this morning - very noticeable the increase in prices and the checkout total - way more than last month.
8:22 am
March 30, 2017
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canadian.100 said
savemoresaveoften said
New O/N rate: 4.25%The below is the last paragraph in the release, sign of potential pause/done as it’s a more dovish statement than the last few we saw.
“ We are resolute in our commitment to achieving the 2% inflation target and restoring price stability for Canadians.”
So BoC is resolute in achieving the 2% inflation target. Good luck! I was in the grocery store this morning - very noticeable the increase in prices and the checkout total - way more than last month.
Thats the part that they will need to change in 12 months time. 2% long time is just not realistic going forward. We had a unrealistic 10year run of 2% and that is an outlier not the norm in my mind.
They will cave in and admit 3% is what should be the realistic long term target going forward.
8:23 am
November 8, 2018
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"First sign of possible pause" - with inflation of about 7% and BoC intent to stay with 2% inflation target? I doubt that, but we will see.
Of course, my take is subjective, as I do benefit from interest rates going up.
8:51 am
August 10, 2018
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One has to think outside the box. Interest rate increases have little impact on the current cost-push inflation. There is a background ulterior motive behind BOC and Fed interest increases. I believe it has more to deal with reducing the excess leverage in the economy, rather than inflation.
8:55 am
January 12, 2019
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savemoresaveoften said
. . .
"Looking ahead, Governing Council will be considering whether the policy interest rate needs to rise further to bring supply and demand back into balance and return inflation to target. Governing Council continues to assess how tighter monetary policy is working to slow demand, how supply challenges are resolving, and how inflation and inflation expectations are responding. Quantitative tightening is complementing increases in the policy rate. We are resolute in our commitment to achieving the 2% inflation target and restoring price stability for Canadians."
That's ⬆ just Fluff, of course ... it's BoC talk for; "We'll wait an' see".
They're next announcement comes on Jan. 25.
Until then . . .
- Dean
" Live Long, Healthy ... And Prosper! "
9:59 am
September 11, 2013
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Last announcement they said rates will need to go higher, this time they said they'll need to consider whether or not to raise further. That's a clear change in message.
10:26 am
October 21, 2013
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And in January they will likely have yet another message.
Yawn.
10:30 am
January 11, 2020
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mechone said
Who will be the first to raise rates??
apparently the deposit brokers...... from 5.55 to 5.57
10:36 am
October 21, 2013
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I don't think the deposit broker reflects today's announcement though. Deposit broker also went up .02 yesterday, and .01 / day for several days before that.
11:02 am
October 27, 2013
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Loonie said
I don't think the deposit broker reflects today's announcement though. Deposit broker also went up .02 yesterday, and .01 / day for several days before that.
I agree there is no impact yet. The first impact would be to loans tied to the prime rate (the FI's revenue side). They will then only raise deposit rates when they need to do so relative to their competition to attract the deposits they need to service their loan book. One could argue there may be no change at all, particularly if demand for mortgages and demand loans stalls.
12:31 pm
April 27, 2017
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savemoresaveoften said
Thats the part that they will need to change in 12 months time. 2% long time is just not realistic going forward. We had a unrealistic 10year run of 2% and that is an outlier not the norm in my mind.
They will cave in and admit 3% is what should be the realistic long term target going forward.
Why? The Federal Reserve has had 2% inflation target for at least a quarter of a century. Canadian inflation has been close to this target for over 20 years (maybe more? Usually a bit under). Saying its “unrealistic” seems to fly in the face of reality.
12:57 pm
October 27, 2013
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I believe return to a 2% target is realistic but it will take time to get there as prior experiences with inflation in the last century have demonstrated.
1:26 pm
March 30, 2017
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mordko said
Why? The Federal Reserve has had 2% inflation target for at least a quarter of a century. Canadian inflation has been close to this target for over 20 years (maybe more? Usually a bit under). Saying its “unrealistic” seems to fly in the face of reality.
For the past 20 years or so, the fundamental shift in global production to China and other third world countries have kept price inflation super low, and I dont recall seeing a 7% inflation handle either. We currently dont have another saving grace like the magic "Made in China" to keep inflation low, everything is already Made in China this time around. In other words, its much easier to keep inflation in check past 20 years then the next 20 years.
1:34 pm
November 8, 2018
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savemoresaveoften said
We currently don't have another saving grace like the magic "Made in China" to keep inflation low, everything is already Made in China this time around.
We have two other things. One is demand and supply. With variable mortgages, car loans, CC balances payments spiking, people have less to spend on other things. Less demand, more supply, expect sales and discounts.
Another is strong dollar due to higher interest rates. Strong dollar: cheaper imports. "Made in China" goods go on sale. Which is, well, almost everything other than groceries.
2:50 pm
April 27, 2017
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There are multiple factors at play. Recession. Aging population. India. Vietnam. Russian invasion. Covid. Government handouts of free money. Taxes. BoC commitment to inflation target. Unknown unknowns.
Guessing is a game we all enjoy but in practice there are multiple scenarios and more uncertainty than usual. Predicting for the next year is a challenge but predicting for the next 20 is a fool’s errand. What most people think is reflected by bond pricing = inflation will subside after a couple of years.
7:40 pm
March 18, 2021
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savemoresaveoften said
For the past 20 years or so, the fundamental shift in global production to China and other third world countries have kept price inflation super low, and I dont recall seeing a 7% inflation handle either. We currently dont have another saving grace like the magic "Made in China" to keep inflation low, everything is already Made in China this time around. In other words, its much easier to keep inflation in check past 20 years then the next 20 years.
China is devaluing the Yuan by lowering interest rates in an attempt to save their housing market ponzi bubble from imploding. This will cause massive inflation in China.
5:13 am
March 30, 2017
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In my mind, BoC will not simply take interest rates as high as it needs to get inflation down to 2%, cuz that terminal ON rate may need to be 6% or higher. That will wreak havoc to Canada's economy, not just a simple recession. Thus the bank's compromise will be allow inflation to get down to 3%, and call that the new normal over the next year.
There are simply too many variable loan products out there, variable mortgages, HELOC, CC debt out there, that the impact of higher prime rates hurt the economy a lot more than say 20 years ago when the biggest consumer debt was a fixed rate mortgage.
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