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Email this7:18 am
November 8, 2018
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Good times keep rolling for savers.
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I haven't expected BoC to keep key rate where it is. I thought BoC will cave to political pressure and start lowering rates.
Glad to be wrong.
7:35 am
February 7, 2019
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Alexandre said
Good times keep rolling for savers.---------
I haven't expected BoC to keep key rate where it is. I thought BoC will cave to political pressure and start lowering rates.
Glad to be wrong.
He's not going to respond to political pressure.
I do believe most leading economists have been predicting rate reductions in June, maybe ...
| CGO |
7:48 am
March 30, 2017
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cgouimet said
He's not going to respond to political pressure.
I do believe most leading economists have been predicting rate reductions in June, maybe ...
Economists like the equity analysts are shameless. They reiterate what CB / CFO told them, then adjust and change as new info are being passed down to them.
The biggest joke trading floor staffs have about economists is the forecast for monthly employment number for Canada. Its ALWAYS a number right around 15-20k every single month during normal times. its not even a forecast !
8:20 am
February 7, 2019
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savemoresaveoften said
Economists like the equity analysts are shameless. They reiterate what CB / CFO told them, then adjust and change as new info are being passed down to them.
The biggest joke trading floor staffs have about economists is the forecast for monthly employment number for Canada. Its ALWAYS a number right around 15-20k every single month during normal times. its not even a forecast !
Many Business Reporters on the major networks leave a lot to be desired.
And sadly, people are willing to pay a lot more to read or listen to economists than you and I ... 
| CGO |
9:01 am
January 12, 2019
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.
Yawn
Everyone and their dog predicted that ... It was pretty much a Given.
And unless something unusual happens, it will probably be a 'Hold' again next time (April 10th), as well.
- Dean
" Live Long, Healthy ... And Prosper! "
11:45 am
September 11, 2013
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Re. political pressure, lower rates means housing prices go up and there's a fair bit of political focus on housing costs these days so I'm not sure the gov't wants to fire that up again right now.
Anyway these rates are not high, historically they're pretty "normal" so I'm fine with them staying as is.
11:48 am
September 29, 2017
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As I have demonstrated TIME AND AGAIN, changes in BoC rates has NOTHING to do with political pressures, inflation, or any other indicators. It is 100% driven by the short term bond market, and the Gov of Can NEVER leads the trend, ALWAYS follows! (this can bee seen for DECADES)
The rate will NOT change until there is at least a 25pts differential between the current BoC rate and the short-term bond market. Today's announcement was NO surprise if you follow this market. Don't pay heed to the talking points...they are meaningless.
The US short-term bond market did dip more than 25pts but has since rebounded so, at the moment it too will not change, unless the downward trend changes again.
11:59 am
November 5, 2022
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BoC should just say...we just do what the Fed tells us to do.
12:33 pm
December 7, 2011
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April 10 - rate reduction not likely, because federal budget on April 16
June 5 - rate reduction likely
July 24 - rate reduction very likely
12:34 pm
November 18, 2017
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By tradition, Mathematicians think of Economists the way Doctors think of Veterinarians. 🙂
(That is, if they were any good, they would be doctors. I'm not judging veterinarians here, let me assure you.)
RetirEd
1:32 pm
January 9, 2011
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Having read what the Fed said today, and then listened to the BoC conference, there's nothing implying any short term rate drop, or even medium term.
As I see it, beyond the core inflation and economic activity, there's the housing problem, which BoC admitted was the biggest one (no surprise).
There's a perfect storm of factors in the near term. Combine the housing supply and demand ratio with pent up demand (to buy and sell), rates no longer in a rising pattern, with the typical spring real estate pickup magnified by El Nino warmer weather. I fully expect housing activity and inflation in the short term will eliminate any thought of rate drops in Canada.
The US has some of the same restraints and their economic activity is stronger, thereby delaying the Fed reducing rates. However "perhaps" political moral suasion in an election year could happen there.
"Keep your stick on the ice. Remember, I'm pulling for you. We're all in this together." - Red Green
1:42 pm
March 30, 2017
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RetirEd said
By tradition, Mathematicians think of Economists the way Doctors think of Veterinarians. 🙂(That is, if they were any good, they would be doctors. I'm not judging veterinarians here, let me assure you.)
The doctors are just jealous knowing how much veterianrians makes compare to them, and potentially a much "easier' job too 🙂
Bill said
Re. political pressure, lower rates means housing prices go up and there's a fair bit of political focus on housing costs these days so I'm not sure the gov't wants to fire that up again right now.Anyway these rates are not high, historically they're pretty "normal" so I'm fine with them staying as is.
As long as not too many homeowners fold on their mortgages and loses their homes, CB are more than happy to keep rates higher for longer, even if inflation seemed under control at sub 3%. CB moves rate up to curb inflation, only need to move rates down IF the economy really need the help, which right now it is not.
I like to see those who specualate and own multiple condos for investment / income purpose be forced to sell at a material loss. That will help to rebalance both price and rent quickly.
2:14 pm
October 27, 2013
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BC recently put the screws to Short Term Rentals (STRs) in a number of municipalities where housing stock is particularly tight and vacancy rate is very low, with a view to cause so many folk who bought properties just to 'hotel' them via VRBO or BnB, to capitulate and turn them into proper housing stock.
I agree with this move to potentially put thousands of units (homes, townhouses, condos) back into longer term housing and that is already happening to some extent. Investors who bought properties just to make a killing off STRs are putting them on the market for sale. They are squealing like pigs BUT it serves them right basically trying to run a hotel business with housing stock. If one wants to be in STRs, then make it a proper commercial business with the proper business licenses et al.
The housing mortgage interest rate dilemma is real but overall, it affects a relatively low percentage of properties. About 65-70% of properties are already mortgage free per StatsCan and maybe half of the remaining have low balances. Of the rest, only perhaps 20-30% of the remaining mortgaged homes have renewals coming up each year assuming the bulk of mortgages are 5 year fixed term.
IOW, the percentage of heavily mortgaged homeowners facing renewals each year is relative small.
3:04 pm
April 27, 2017
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Mortgage delinquencies are going up. By 135% in Ontario.
Interest rate isn’t the only tool here. BoC might end QT first.
Anyway, inflation is notoriously hard to predict. Money supply and Mr Market (bond prices) are the best indicators but far from reliable. Nobody really knows.
3:47 pm
October 27, 2013
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Still, only about 0.18% of mortgages are in arrears, which is up about 35% from 0.13% a year or two ago. https://financialpost.com/news/mortgage-delinquency-rates-ontario-british-columbia-soar Canada can't quite help it if 'regional' Ontarians and 'regional' British Columbians threw caution to the wind and became reckless.
Added: I agree few are talking about the imminent end to QT which will affect the shape of the yield curve.
5:42 pm
September 29, 2017
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ALL of these are interesting talking points as to understand what things are happening in our economy BUT they are gibberish made to sound like the Feds are in control or have an influence... they do not... they are FOLLOWERS of the market... NOT makers of the market, at least not in any direct way.
The ONLY thing that will cause the rate to budge is if the short-term bond market changes, and moves more than 0.25% away from the BoC rate, or at least is expected to do so in short order at the time of the decision date, based on the momentum of the trend at that time. BUT they will never LEAD the rate change. PERIOD!
And no one can predict the likelihood of change until closest to the announcement date, when the market determines the trend. Any speculation is just that, speculation.
This is all objectively verifiable.
6:02 pm
September 11, 2013
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That makes it all the more interesting that the BoC announcements never mention that the short-term bond market 100% drives their decisions, they always cite the usual slew of factors that people on here regularly refer to.
6:05 pm
November 8, 2021
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Canada's economy is not performing as well, to justify a rate reduction anytime soon. Governments will continue making buzz about lowering rates, to give hope to many struggling Canadians. So, holding rates at 5% is likely to continue for a little while longer, despite politicians desire. The Canadian economy is at the bottom in the G7. Inflation is not tamed just yet, compounded carbon taxes are continuing to cost more to all, the lack of affordable housing and shortage of housing will continue to cause rising costs, corporations are cutting staff. Under these conditions, it's hard to see interest rates going down. Most banks bet on a longer term recovery, so their best rates now are within 1-1.5 year terms.
6:06 pm
September 29, 2017
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It is just subterfuge to make themselves look and sound intelligent. It requires little to see what the true influence is.
6:09 pm
September 29, 2017
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Again, NOTHING to do with controlling inflation, nothing to do with political pressures. ANYONE can see the TRUE and ONLY influencing factor.... don't be fooled.
Once I checked this out and proved it to myself, I no longer fall for all these talking points.
Please write your comments in the forum.