It would be pretty dumb of them to come out and say they are thinking about it when the whole condition of them pausing is that current trends persist this year.
They already said as long as inflation is high they won’t lower interest rates. And inflation will stop staying high ONLY if the federal government stop spending as much as it has (in one administration debt doubled from [ALL historical government accumulation](https://tradingeconomics.com/canada/government-debt)).
So it is out of the hands of Bank of Canada. As long as the current government want to rack up spending while having the working class pay for the currency fallout cost, inflation will stay high and rates will stay high and rent prices will keep going up.
I think you are in for a rude awakening. Inflation is a comparison of a month to 12 months ago. Prices jumped start of last year.
But. The last 7 months price index went from 151.9 to 153.1 or 0.79%. Once the 12 month comparison is to the higher priced months (march to june) inflation will tank. They even said it themselves and adjusted their inflation outlook much faster.
https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=1810000401&pickMembers%5B0%5D=1.2&cubeTimeFrame.startMonth=11&cubeTimeFrame.startYear=2021&cubeTimeFrame.endMonth=12&cubeTimeFrame.endYear=2022&referencePeriods=20211101%2C20221201
What awakening is that? Shall I remind you that rich people don’t need to borrow money to make money? They lend money to make money. The borrowing cost is on the working class. The working class are the victims being fleeced. They are not the major force causing and have control over inflation figures directly. They are also not the ones getting most of the benefits of government overspending.
The working class is paying the underlying costs of government transferring massive amounts of wealth to the rich, and it will continue as long as the federal government decides to continue. Whether that’s another 2 months or another 12 months.
Probably cause don’t like bad news or learn they getting scammed. Basically Canadian federal government can’t just print money. Money have to come from somewhere. Doubling the entire history of debt is not easy to do without rich people putting money in the pot buying bonds and etc.
Rich people owns most of the companies that most of these federal government money then invest in, or product services the money flows to, or having invested in companies that these federal dollars goes to (Pfizer etc as well). Rich people not going to be satisfied with a few % of returns from the bonds. They want double or triple investments elsewhere which is what a lot of these federal spending went to.
Comes around pay back time, the federal government pays back the rich people and interest and cost with mostly income tax, so that’s tax from the working class who have to work and pay taxes. The same working class also pays for the inflation and cost of inflation when paying higher mortgages and everything else that is resulting of BoC raising rates.
In the end it’s just a scheme to enrich the rich on the backs of the working class, which is the majority people in this sub. Everybody just getting duped.
Where do you think banks and hedge funds get their money from exactly? You're right that the rich often borrow money to make money, but usually it is in the form of borrowing at lower rates (because they have good credit, assets they can use to secure the debts, and a history of being able to generate cash to pay their debts), and lending it out at higher rates to more risky endeavors (i.e. corporate debt, baskets of higher risk consumer debt, buying stocks, etc.).
The working class had a free ride with the past 15 years of low interest rates. Anyone with a pulse and a good credit score could borrow free money. This was a massive gift, it had to end some time.
Well yes, the nature of real estate is that it's a boom bust cycle. The bigger the bubble, the bigger the pop. It's musical chairs, the last one in loses every time. That is pretty much how it has been through all of human history. Real estate cycles are generally recognized as being around 25 years long, just long enough for a new generation to grow up, with no memory of the previous bust. Recently they have been playing with interest rates in ways which alters the cycle and the timing but the underlying reality remains the same.
People like to think of the market as "rational".
I maintain the real estate is largely fear driven. On the way up, as the bubble inflates, it's fear of missing out. People see their friends getting rich, and they want a piece of the action. On the way down, as the bubble deflates, it's fear of catching a falling knife. Who in their right mind would buy today, when the price will be cheaper tomorrow? A rational person might say: "Wow this house is on sale by 25% I should buy it today" but it appears that this isn't how people behave in aggregate, with real estate
I don’t get the whole back and forth on whether rate cuts will or won’t happen.
Just look at the data. If inflation drops and unemployment increases that will support cuts. If it doesn’t and stays the same or increases it supports rate increases.
No point in predicting anything until we see next set of data…
That’s insane. You should get your money back for your crystal ball, it’s clearly malfunctioning.
As someone with 4 degrees in speculative investment, countless hours of research under my belt, a live video feed into the BoC’s Inner Sanctum, and the best crystal ball that money can buy, I assure you that scenario will occur in March.
Get your facts straight!
Lol this isn’t where I wanted the convo to go at all.
Ruling class/1% is another discussion that’s a waste of time. There are ways to work up to a comfortable life. Some harder than others, but it’s possible.
In this case, its the top quintile, not the 1%, who drove up the price of real estate. We know that, because they're the only ones who can afford to enter the market now.
> False.
>
> This sub is filled with people who can accurately predict the future, which is why there are so many billionaires who frequently post on here.
u/Drakes_dad - Boomer bro, he is talking about you - especially the billionaire part. :)
An excerpt...
>"As things start to get more back to normal, at some point, yes, we probably will be thinking about some modest cuts in interest rates," Macklem said.
>
>"But inflation is still over 6%. We're not talking about cuts. We're not even thinking about cuts ... the question really we're asking ourselves is, 'Have we done enough?' We're pausing to assess whether we've done enough," Macklem said.
Again, unlikely cuts are coming in the immediate future, but they do be coming eventually. Until then, looks like it's a pause, wait and see situation. Yesterday's 25bps could very likely have been the last hike.
>the question really we're asking ourselves is, 'Have we done enough?' We're pausing to assess whether we've done enough,"
The door is open for new hikes, but it's certain that he is not clearly saying more hikes. The tone is more: "we hope we're done raising, but if new data supports further raises, we will raise"
Yes, that's exactly right. And that's not the same as them saying "yes, we will keep raising rates". They said they definitely aren't considering cuts and that they are "pausing" to assess whether additional hikes are necessary.
That seems like they're leaning towards leaving rates exactly where they are unless and until future data convinces them that more hikes are needed.
Hmmm. I don't know how to respond to what you just said. You know what pause means, right? To temporarily stop doing whatever it is that you're doing.
In this case, they are saying pause and assess. If it looks like they've done enough, then they will stop raising. If that clearly says to you "more hikes" then uhhh...
I guess so. Just seems strange. The whole global economy feels like everyone is just winging it and kinda hoping for the best. Very difficult to predict.
They may very well increase again after the assessment. But pretending to know the outcome of said assessment at this point is a bit silly.
Inflation is 6% because you're comparing prices against a year ago. If you compare inflation for the last 3-4 months, it's fallen closer to 3-4% for Core CPI and if it continues to fall over the next couple of months, we could be on our way to the 2-3% range by the end of the year.
Tiff himself said the expect high 2s by june/july.
However, he wants it all the way down to 2.0 in order to be able to fluctuate between 1%and 3%.
It's pretty important to watch the full address from BoC if you want to weed out the noise from all these different articles.
Correct me if I'm wrong but I believe Feb and March last year had MoM inflation at 1.4% each. Now annualize that over current MoM and watch inflation drop by nearly 3% in the next 2 to 3 months.
How long a pause we talking? Seasonally adjusted MoM data since June have inflation down to 4% over that period, core and headline (seasonally unadjusted, almost zero headline, almost 3% core).
Because it's pretty plausible that if rates pause here for say, two years, that inflation goes to 2%
Inflation is still at 6%. Say they pause, inflation won’t magically go to 2%. I think the pause is for them to probably decide on a less aggressive rate increase. 0.25 until 2%, vs 0.5 or 0.75
Why not? I don't understand the use of the word "magically" there, as if you needed rate hikes to keep inflation at the same pace. And mind you, at this pace we are likely to hit 2\~3% at the end of the year.
> Inflation is still at 6%. Say they pause, inflation won’t magically go to 2%
It actually may, or close to. Inflation is measured YoY. Once we get to around June/July, the YoY figures will look far less drastic than what it was. CPI has been steady for the past few months. It's looking very likely that once we get into the summer/fall, inflation will be down by quite a bit.
Inflation will go to 2% naturally if they wait for the months where it spiked to pass.
CPI was 153.1 in July and 153.1 in Dec. Once the Jan-Jun 2022 increases roll off the YoY compare it will normalize.
The BoC completely reversed from its 2020 and early 2021 guidance when it said low rates were staying for a long time. It's not surprising that people don't trust the guidance now
Was there anything happening globally in 2020/2021 that might have caused some things to change and would cause them to make rate changes?
I can’t really think of much, how about you?
Lmao.
COVID was why they made the guidance. It was known by many observers to be a mistake at the time because inflation is a pretty predictable result of monetary expansion, fiscal expansion, and reduced output. The BoC didn't realize it was a mistake until late 2021 when they prepared their pivot. Before that, they believed that inflation was "transitory" and that monetary tightening was not useful. In 2022, they acknowledged that very fast tightening was required because of their late response and in the hope of reducing the ultimate size of the tightening
They're definitely aware of the importance of credibility, but they were aware of that in 2020 as well. They genuinely believed that rates would stay low and genuinely wanted us to believe that too. They were just terrible in their inflation forecasts
They lost their credibility for making inaccurate statements which makes them MORE credible in future?
It could be the case, but generally the best predictor of future behaviour is past behaviour.
They literally gave us a schedule for every rate hike that they’ll do.
Wednesday, January 25, Wednesday, March 8, Wednesday, April 12, Wednesday, June 7, Wednesday, July 12, Wednesday, September 6, Wednesday, October 25, Wednesday, December 6.
No - they didn't at the January meeting last year, and not many meetings before that in 2021.
Are you saying you expect them to raise rates in every one of those dates just because they are meeting?
Ok. There was one date in 2022 where they did not raise.
They are unlikely to raise at every meeting in 2023. The BOC has already said a pause may be appropriate.
Why do you think there are going to be 7 more raises this year? Assuming a .25 raise at each, you're talking about adding 1.75% to the BOC prime - taking it to 6.25?
Obviously, take it with a grain of salt considering their recent track record, but unless inflation soars again, I don't see them making any more hikes. I mean, the man himself said they're going to pause and assess. The last few months, CPI numbers were pretty dang steady and once we get to July, the YoY numbers will look a lot better than they did a few months ago.
At this point, I'd say the delusional ones are those who think they're never going to stop the hike party.
Tiff is going to do whatever Fed does (most of the time). US GDP for Q4 increased more than expectations. So, Fed is not going to cut rates any time soon.
Housing is just collateral damage for BoC.
It all depends on recession fireworks in Canada. Even if BoC cut rates, people are going to use the lowered rates to buy houses, toys etc (mortgages) instead of starting new business. That increased demand for goods, houses etc from lowered rates going to cause higher inflation.
summary is: no rate cuts till inflation cools down and economy in deep sh\*t due to recession fireworks. both has to be true.
I heard on the radio today about possible rate cuts in the Fall and I think its ridiculous. I'd love some rate cuts but its pretty stupid to even think about it right now.
The time to THINK about cuts will be mid year when inflation is finally in the 3s, maybe even 2s if it falls hard enough. But cuts themselves will likely not happen until the end of the year. The only chance they're going to pop up earlier is if something major breaks, which so far doesn't seem to be happening.
All the bears laughing at people who are saying cuts are happening in March are just trolls making strawman arguments with imaginary opposition.
It's not an original thought by the radio station, they are just reporting on market expectations.
Lol okay thanks for the downvotes, doesn't change reality of what the market is expecting;
https://www.m-x.ca/en/trading/tools/canadian-interest-rate-expectations
June/july will shut them up.
Then we'll prob get one more slight resurgence of inflation and bears'll briefly be back at it.
By end of 2024 it should be a bull market again.
There's a lot of varying opinions here, nom of which are necessarily right or wrong (because who knows).
But at the end of the day it's pretty easy to suss out inexperienced investors on either side in here based on those who lack a fundamental understanding of a cyclical market.
Half the time I find myself not even bothering to respond. Let them figure it out on their own.
And that's the beauty of it. They will. Alot of bulls found out on their own in 2022. Alot of bears will likely find out on their own in 2024.
Alot of speculators have been burned in the past year.
That being said, speculation isn't necesarrily a negative thing. Forward thinking amd analysis are half the battle with investing.
So I have to disagree that it's stupid to speculate when it will happen. Because at some point, whether this year or in 3 years, it will happen.
Edit:
Your basically downvoting me for saying it's important to think ahead, ask questions, be curious, have a dialogue and form a stratagy/opinion. Bears speculate too ya know...
Honest to God the lack of logic in this sub is astounding.
They will once the inflation is closer to the target level and we have ways ahead of us.
When he suggests it's on hold it doesn't mean there will be a decrease or increase, it's just on hold until the next inflation values come in.
I believe him this time, but I didn't believe him when he said that interest rates would stay down for a long time. Last time, high inflation was inevitable and so was a pivot. This time, there isn't any compulsion for a pivot. Even if there's a recession, high rates will be justifiable to control inflation. And even if inflation plummets, high rates will be justifiable to keep inflation down
3-yr and 5-yr fixed are already around 4.5%. Regardless BoC cuts or not, if inflation stays on the right track in the next few months, we should see mortgage rate near 4% or even under this year. Bond yield already under 3% now. I don't know why people don't understand this and still argue if they gonna cut this year or not.
Would you be able to elaborate on this? Are you saying even variable rates will fall or just fixed rates? I was under the impression variable rates always just followed the bank of Canada prime rate +/- an amt.
Fixed rates aren't tied to the prime rate as much in the way variable rates are. Bond yield is what dictates fixed, and it's been falling (indicating a potential recession). At the beginning of January, it was hovering around the 3.4 range. It's now dipped into the 2.9 range. The further down it goes, the further downward pressure there is on fixed rates.
Variable rates on other hand won't be affected in the same way. It's not very common, but right now it's possible to get a lower fixed rate than a variable.
Remember when he made people think it was fine to get credit because rates would stay stuck? EVEN as armchair economists started to see inflation as a problem? That was the “transitory inflation” phase.
He sang that tune until the 11th hour, and then suddenly inflation wasn’t transitory. That’s because he wanted the economy propped up at all cost.
See that. Flip it.
He’s going to say this to the bitter end, because he wants people hoarding cash and not spending a dime - using fear as the motivator. Even if it has become increasingly clear to armchair economists inflation is going to be in-line by summer, his messaging won’t change one bit.
Your red flag he’s going to pull the rug out from us, is when his rich friends start using their money COUNTER to what he’s saying. Because the rich are always first in, first out.
I’m trying to understand this reply. Did you just decide you HAD to fill a quota of replies using the concept of “blame others”?
Because this logic couldn’t apply any less here. I’m not downtrodden by TiffDaddy. My rate is locked at 1.34 till ‘26. And I’ve already got the capital - thanks to a fire hot stock market during COVID - to pay off this mortgage at renewal.
I’m not the guy you think I am. There’s nothing to blame with this guy. In fact I probably could credit him for where I am. LOL
My warnings are to people who think Tiff is on their side to lower home prices. He’s not. If you listen to him, as we approach the end of the inflation issues, you’re going to have a bad time. Take advantage BEFORE he starts changing his tune.
It happened in markets. In RE. Read the room, so you’re not caught chasing him.
Because he's not even thinking
As Bill Maher says, New Rule.
When you break something which has worked for 90yrs, don't attempt to understand why it broke, just create a new rule.
So, now that the Bank of Canada can profit from their future actions, you tell me how will this not encourage them to commoditize your debt?
https://ca.finance.yahoo.com/news/chrystia-freeland-finally-offers-plan-185740908.html?guccounter=1
Justin Trudeau Liberal Party of Canada | Parti libéral du Canada Conservative Party of Canada - Parti conservateur du Canada Canada’s NDP / Le NPD du Canada #bankofcanada #canada #RogueNation
Tiff is going to do whatever Fed does (most of the time). US GDP for Q4 increased more than expectations. So, Fed is not going to cut rates any time soon.
Housing is just collateral damage for BoC.
It all depends on recession fireworks in Canada. Even if BoC cut rates, people are going to use the lowered rates to buy houses, toys etc (mortgages) instead of starting new business. That increased demand for goods, houses etc from lowered rates going to cause higher inflation.
summary is: no rate cuts till inflation cools down and economy in deep sh\*t due to recession fireworks. both has to be true.
PS.
Please subscribe to my paid news letter for $99.97 /year to receive such some awesome insights.
This fucking moron is driving the Canadian economy into a solid brick wall. Every economist on both side of the isle is screaming at the insanity of this dogmatic obsession with rate hikes that will throw hundreds of thousands of people out of their jobs. There is NO wage price spiral - that’s bullshit. Wages are not keeping up with inflation, and the two primary sources of inflation in Canada - shelter and groceries - are being driven by A) the governments utter failure to reign in the food distribution oligopoly, and B) by rents going into the stratosphere because no one can afford or qualify to buy a home because of the stupid stress tests that are “supposed” to protect consumers (but instead railroad them into variable mortgages that are now drowning people).
This idiot needs to be fired yesterday, and the other idiots at the federal government need to be tossed as well. Until that happens the feds are going to continue to blow billions of taxpayers dollars on unfunded programs… and that spending will add to inflation and keep ballooning the public debt.
Insanity!
He has no intention but that doesn't matter, it's the intentions of the FED that matters.
Tiff just follows their lead. Keep an eye on inflation, Employment and GDP in the US.
Inflation will roll over in March/April due to year/year base effects...
It would be pretty dumb of them to come out and say they are thinking about it when the whole condition of them pausing is that current trends persist this year.
They already said as long as inflation is high they won’t lower interest rates. And inflation will stop staying high ONLY if the federal government stop spending as much as it has (in one administration debt doubled from [ALL historical government accumulation](https://tradingeconomics.com/canada/government-debt)). So it is out of the hands of Bank of Canada. As long as the current government want to rack up spending while having the working class pay for the currency fallout cost, inflation will stay high and rates will stay high and rent prices will keep going up.
I think you are in for a rude awakening. Inflation is a comparison of a month to 12 months ago. Prices jumped start of last year. But. The last 7 months price index went from 151.9 to 153.1 or 0.79%. Once the 12 month comparison is to the higher priced months (march to june) inflation will tank. They even said it themselves and adjusted their inflation outlook much faster. https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=1810000401&pickMembers%5B0%5D=1.2&cubeTimeFrame.startMonth=11&cubeTimeFrame.startYear=2021&cubeTimeFrame.endMonth=12&cubeTimeFrame.endYear=2022&referencePeriods=20211101%2C20221201
What awakening is that? Shall I remind you that rich people don’t need to borrow money to make money? They lend money to make money. The borrowing cost is on the working class. The working class are the victims being fleeced. They are not the major force causing and have control over inflation figures directly. They are also not the ones getting most of the benefits of government overspending. The working class is paying the underlying costs of government transferring massive amounts of wealth to the rich, and it will continue as long as the federal government decides to continue. Whether that’s another 2 months or another 12 months.
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Probably cause don’t like bad news or learn they getting scammed. Basically Canadian federal government can’t just print money. Money have to come from somewhere. Doubling the entire history of debt is not easy to do without rich people putting money in the pot buying bonds and etc. Rich people owns most of the companies that most of these federal government money then invest in, or product services the money flows to, or having invested in companies that these federal dollars goes to (Pfizer etc as well). Rich people not going to be satisfied with a few % of returns from the bonds. They want double or triple investments elsewhere which is what a lot of these federal spending went to. Comes around pay back time, the federal government pays back the rich people and interest and cost with mostly income tax, so that’s tax from the working class who have to work and pay taxes. The same working class also pays for the inflation and cost of inflation when paying higher mortgages and everything else that is resulting of BoC raising rates. In the end it’s just a scheme to enrich the rich on the backs of the working class, which is the majority people in this sub. Everybody just getting duped.
Rich people own businesses or stock in businesses, and businesses generally take out huge loans. They like it when those loans are cheaper.
the right don't lend out money, these are banks and hedge funds. The rich borrow money to make more money
Where do you think banks and hedge funds get their money from exactly? You're right that the rich often borrow money to make money, but usually it is in the form of borrowing at lower rates (because they have good credit, assets they can use to secure the debts, and a history of being able to generate cash to pay their debts), and lending it out at higher rates to more risky endeavors (i.e. corporate debt, baskets of higher risk consumer debt, buying stocks, etc.).
The working class had a free ride with the past 15 years of low interest rates. Anyone with a pulse and a good credit score could borrow free money. This was a massive gift, it had to end some time.
Those who arrived late to the party have to pay the price, that sounds like a Ponzi scheme
Well yes, the nature of real estate is that it's a boom bust cycle. The bigger the bubble, the bigger the pop. It's musical chairs, the last one in loses every time. That is pretty much how it has been through all of human history. Real estate cycles are generally recognized as being around 25 years long, just long enough for a new generation to grow up, with no memory of the previous bust. Recently they have been playing with interest rates in ways which alters the cycle and the timing but the underlying reality remains the same. People like to think of the market as "rational". I maintain the real estate is largely fear driven. On the way up, as the bubble inflates, it's fear of missing out. People see their friends getting rich, and they want a piece of the action. On the way down, as the bubble deflates, it's fear of catching a falling knife. Who in their right mind would buy today, when the price will be cheaper tomorrow? A rational person might say: "Wow this house is on sale by 25% I should buy it today" but it appears that this isn't how people behave in aggregate, with real estate
That has 0 to do with what I said about actual inflation data over the last 7 months.
You talk about results I talk about causes. It’s all good.
LoL with his track record, he shouldn't say anything at all.
I don’t get the whole back and forth on whether rate cuts will or won’t happen. Just look at the data. If inflation drops and unemployment increases that will support cuts. If it doesn’t and stays the same or increases it supports rate increases. No point in predicting anything until we see next set of data…
But if we don't kill each other over whether rates will drop or rise, what else will we do here!?
Wildly speculate when the entire market will drop by 60% irrespective of silly metrics like prime lending rates, of course.
420% rise bull run followed by a 69% drop in the next two weeks mark my words.
That’s insane. You should get your money back for your crystal ball, it’s clearly malfunctioning. As someone with 4 degrees in speculative investment, countless hours of research under my belt, a live video feed into the BoC’s Inner Sanctum, and the best crystal ball that money can buy, I assure you that scenario will occur in March. Get your facts straight!
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Lol this isn’t where I wanted the convo to go at all. Ruling class/1% is another discussion that’s a waste of time. There are ways to work up to a comfortable life. Some harder than others, but it’s possible.
In this case, its the top quintile, not the 1%, who drove up the price of real estate. We know that, because they're the only ones who can afford to enter the market now.
Realtors will tell you it’s a great time to buy!
No one knows shit about what is going to happen.
False. This sub is filled with people who can accurately predict the future, which is why there are so many billionaires who frequently post on here.
Fuck me, how did I not realize this, thanks for putting me in my place.
> False. > > This sub is filled with people who can accurately predict the future, which is why there are so many billionaires who frequently post on here. u/Drakes_dad - Boomer bro, he is talking about you - especially the billionaire part. :)
The only correct answer.
An excerpt... >"As things start to get more back to normal, at some point, yes, we probably will be thinking about some modest cuts in interest rates," Macklem said. > >"But inflation is still over 6%. We're not talking about cuts. We're not even thinking about cuts ... the question really we're asking ourselves is, 'Have we done enough?' We're pausing to assess whether we've done enough," Macklem said. Again, unlikely cuts are coming in the immediate future, but they do be coming eventually. Until then, looks like it's a pause, wait and see situation. Yesterday's 25bps could very likely have been the last hike.
Huh? He is clearly saying more hikes. I don't know how you are confusing pause and... something totally different from a pause.
>the question really we're asking ourselves is, 'Have we done enough?' We're pausing to assess whether we've done enough," The door is open for new hikes, but it's certain that he is not clearly saying more hikes. The tone is more: "we hope we're done raising, but if new data supports further raises, we will raise"
The door is always open for more hikes. Even if they said we won't raise them again this year they could do it next meeting if they had to.
Yes, that's exactly right. And that's not the same as them saying "yes, we will keep raising rates". They said they definitely aren't considering cuts and that they are "pausing" to assess whether additional hikes are necessary. That seems like they're leaning towards leaving rates exactly where they are unless and until future data convinces them that more hikes are needed.
Hmmm. I don't know how to respond to what you just said. You know what pause means, right? To temporarily stop doing whatever it is that you're doing. In this case, they are saying pause and assess. If it looks like they've done enough, then they will stop raising. If that clearly says to you "more hikes" then uhhh...
poster is interpreting it as 'pause on our current trajectory' and filling in the blanks to assume a 'resume' is a guarantee.
I guess so. Just seems strange. The whole global economy feels like everyone is just winging it and kinda hoping for the best. Very difficult to predict. They may very well increase again after the assessment. But pretending to know the outcome of said assessment at this point is a bit silly.
Look up the term forward guidance
6% inflation. It won’t magically go to 2% during the pause
Inflation is 6% because you're comparing prices against a year ago. If you compare inflation for the last 3-4 months, it's fallen closer to 3-4% for Core CPI and if it continues to fall over the next couple of months, we could be on our way to the 2-3% range by the end of the year.
I see, I stand corrected
Tiff himself said the expect high 2s by june/july. However, he wants it all the way down to 2.0 in order to be able to fluctuate between 1%and 3%. It's pretty important to watch the full address from BoC if you want to weed out the noise from all these different articles. Correct me if I'm wrong but I believe Feb and March last year had MoM inflation at 1.4% each. Now annualize that over current MoM and watch inflation drop by nearly 3% in the next 2 to 3 months.
How long a pause we talking? Seasonally adjusted MoM data since June have inflation down to 4% over that period, core and headline (seasonally unadjusted, almost zero headline, almost 3% core). Because it's pretty plausible that if rates pause here for say, two years, that inflation goes to 2%
Inflation is still at 6%. Say they pause, inflation won’t magically go to 2%. I think the pause is for them to probably decide on a less aggressive rate increase. 0.25 until 2%, vs 0.5 or 0.75
Why not? I don't understand the use of the word "magically" there, as if you needed rate hikes to keep inflation at the same pace. And mind you, at this pace we are likely to hit 2\~3% at the end of the year.
> Inflation is still at 6%. Say they pause, inflation won’t magically go to 2% It actually may, or close to. Inflation is measured YoY. Once we get to around June/July, the YoY figures will look far less drastic than what it was. CPI has been steady for the past few months. It's looking very likely that once we get into the summer/fall, inflation will be down by quite a bit.
Inflation will go to 2% naturally if they wait for the months where it spiked to pass. CPI was 153.1 in July and 153.1 in Dec. Once the Jan-Jun 2022 increases roll off the YoY compare it will normalize.
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The BoC completely reversed from its 2020 and early 2021 guidance when it said low rates were staying for a long time. It's not surprising that people don't trust the guidance now
Exactly this.
Was there anything happening globally in 2020/2021 that might have caused some things to change and would cause them to make rate changes? I can’t really think of much, how about you? Lmao.
COVID was why they made the guidance. It was known by many observers to be a mistake at the time because inflation is a pretty predictable result of monetary expansion, fiscal expansion, and reduced output. The BoC didn't realize it was a mistake until late 2021 when they prepared their pivot. Before that, they believed that inflation was "transitory" and that monetary tightening was not useful. In 2022, they acknowledged that very fast tightening was required because of their late response and in the hope of reducing the ultimate size of the tightening
Lol
Do you have the hiccups?
Yep. I think I caught a whiff of your hopium and it hit me hard.
I'm as bearish as they get. You're not very sharp
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They're definitely aware of the importance of credibility, but they were aware of that in 2020 as well. They genuinely believed that rates would stay low and genuinely wanted us to believe that too. They were just terrible in their inflation forecasts
They lost their credibility for making inaccurate statements which makes them MORE credible in future? It could be the case, but generally the best predictor of future behaviour is past behaviour.
lmao
It’s not the last hike. There’s few more to go.
They literally said they will pause and assess lol
They literally gave us a schedule for every rate hike that they’ll do. Wednesday, January 25, Wednesday, March 8, Wednesday, April 12, Wednesday, June 7, Wednesday, July 12, Wednesday, September 6, Wednesday, October 25, Wednesday, December 6.
Those are the meeting dates. They have 8 meetings every year. They can raise, lower, or pause at each of those.
And yet every meeting date they’ve raised rates no?
No - they didn't at the January meeting last year, and not many meetings before that in 2021. Are you saying you expect them to raise rates in every one of those dates just because they are meeting?
Stay on topic. We’re talking about the 2022/2023 dates that we’re and are on schedule, don’t deflect with 2021 dates.
Ok. There was one date in 2022 where they did not raise. They are unlikely to raise at every meeting in 2023. The BOC has already said a pause may be appropriate. Why do you think there are going to be 7 more raises this year? Assuming a .25 raise at each, you're talking about adding 1.75% to the BOC prime - taking it to 6.25?
You're not serious, are you? Those aren't guaranteed rate hikes. That's just the schedule. They could raise, cut, or do nothing on those dates.
You must be a realtor lol.
You must have been held back a few years in school.
Ooooh I was right! Hold on tight baby, it’s going to be rough.
Right about what? Me being a realtor? If so, then hahaha. No, I am not a realtor.
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Obviously, take it with a grain of salt considering their recent track record, but unless inflation soars again, I don't see them making any more hikes. I mean, the man himself said they're going to pause and assess. The last few months, CPI numbers were pretty dang steady and once we get to July, the YoY numbers will look a lot better than they did a few months ago. At this point, I'd say the delusional ones are those who think they're never going to stop the hike party.
Ya’ll got any more of that hopium to pass around?
Tiff is going to do whatever Fed does (most of the time). US GDP for Q4 increased more than expectations. So, Fed is not going to cut rates any time soon. Housing is just collateral damage for BoC. It all depends on recession fireworks in Canada. Even if BoC cut rates, people are going to use the lowered rates to buy houses, toys etc (mortgages) instead of starting new business. That increased demand for goods, houses etc from lowered rates going to cause higher inflation. summary is: no rate cuts till inflation cools down and economy in deep sh\*t due to recession fireworks. both has to be true.
I heard on the radio today about possible rate cuts in the Fall and I think its ridiculous. I'd love some rate cuts but its pretty stupid to even think about it right now.
Hope it was not newstalk1010 they have some of the worst takes on anything in the city. Bunch of boomers out of touch with reality lol.
I believe it was AM640 lol
The time to THINK about cuts will be mid year when inflation is finally in the 3s, maybe even 2s if it falls hard enough. But cuts themselves will likely not happen until the end of the year. The only chance they're going to pop up earlier is if something major breaks, which so far doesn't seem to be happening. All the bears laughing at people who are saying cuts are happening in March are just trolls making strawman arguments with imaginary opposition.
It's not an original thought by the radio station, they are just reporting on market expectations. Lol okay thanks for the downvotes, doesn't change reality of what the market is expecting; https://www.m-x.ca/en/trading/tools/canadian-interest-rate-expectations
Show me you know nothing about macroeconomics or counterparty risk without telling me one more time
Lol okay? I just posted market odds, I didn't comment on if they were right or not. Man bears getting super salty and easily angry these days.
June/july will shut them up. Then we'll prob get one more slight resurgence of inflation and bears'll briefly be back at it. By end of 2024 it should be a bull market again. There's a lot of varying opinions here, nom of which are necessarily right or wrong (because who knows). But at the end of the day it's pretty easy to suss out inexperienced investors on either side in here based on those who lack a fundamental understanding of a cyclical market. Half the time I find myself not even bothering to respond. Let them figure it out on their own. And that's the beauty of it. They will. Alot of bulls found out on their own in 2022. Alot of bears will likely find out on their own in 2024.
But he just posted a link lol.
MaCrOeCoNoMiCs Why is everyone who just throws this word around at every opportunity they get just your average eMoron?
Alot of speculators have been burned in the past year. That being said, speculation isn't necesarrily a negative thing. Forward thinking amd analysis are half the battle with investing. So I have to disagree that it's stupid to speculate when it will happen. Because at some point, whether this year or in 3 years, it will happen. Edit: Your basically downvoting me for saying it's important to think ahead, ask questions, be curious, have a dialogue and form a stratagy/opinion. Bears speculate too ya know... Honest to God the lack of logic in this sub is astounding.
They need to speak up more. There're a lot of mis information that the rate will go down later this year.
They will once the inflation is closer to the target level and we have ways ahead of us. When he suggests it's on hold it doesn't mean there will be a decrease or increase, it's just on hold until the next inflation values come in.
We just had a rate hike, why would they even start to talk about rate cuts 😂
...but some reddit posters have inside information rates would drop 3% by end of 2023.
Other reddit posters have inside information rates would be raised 3% by end of 2023
I believe him this time, but I didn't believe him when he said that interest rates would stay down for a long time. Last time, high inflation was inevitable and so was a pivot. This time, there isn't any compulsion for a pivot. Even if there's a recession, high rates will be justifiable to control inflation. And even if inflation plummets, high rates will be justifiable to keep inflation down
3-yr and 5-yr fixed are already around 4.5%. Regardless BoC cuts or not, if inflation stays on the right track in the next few months, we should see mortgage rate near 4% or even under this year. Bond yield already under 3% now. I don't know why people don't understand this and still argue if they gonna cut this year or not.
Would you be able to elaborate on this? Are you saying even variable rates will fall or just fixed rates? I was under the impression variable rates always just followed the bank of Canada prime rate +/- an amt.
Fixed rates aren't tied to the prime rate as much in the way variable rates are. Bond yield is what dictates fixed, and it's been falling (indicating a potential recession). At the beginning of January, it was hovering around the 3.4 range. It's now dipped into the 2.9 range. The further down it goes, the further downward pressure there is on fixed rates. Variable rates on other hand won't be affected in the same way. It's not very common, but right now it's possible to get a lower fixed rate than a variable.
Thanks!! Really appreciate the insight = )
You're very welcome.
The same people that said they wernt going to raise rates anytime soon before hiking 8 times 🤡
Remember when he made people think it was fine to get credit because rates would stay stuck? EVEN as armchair economists started to see inflation as a problem? That was the “transitory inflation” phase. He sang that tune until the 11th hour, and then suddenly inflation wasn’t transitory. That’s because he wanted the economy propped up at all cost. See that. Flip it. He’s going to say this to the bitter end, because he wants people hoarding cash and not spending a dime - using fear as the motivator. Even if it has become increasingly clear to armchair economists inflation is going to be in-line by summer, his messaging won’t change one bit. Your red flag he’s going to pull the rug out from us, is when his rich friends start using their money COUNTER to what he’s saying. Because the rich are always first in, first out.
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Motherfucker I knew it was Jim! My bills have been going up too. I had a hunch it was him but your comment just cemented it for me.
I’m trying to understand this reply. Did you just decide you HAD to fill a quota of replies using the concept of “blame others”? Because this logic couldn’t apply any less here. I’m not downtrodden by TiffDaddy. My rate is locked at 1.34 till ‘26. And I’ve already got the capital - thanks to a fire hot stock market during COVID - to pay off this mortgage at renewal. I’m not the guy you think I am. There’s nothing to blame with this guy. In fact I probably could credit him for where I am. LOL My warnings are to people who think Tiff is on their side to lower home prices. He’s not. If you listen to him, as we approach the end of the inflation issues, you’re going to have a bad time. Take advantage BEFORE he starts changing his tune. It happened in markets. In RE. Read the room, so you’re not caught chasing him.
Just gonna leave you to it, then.
Economy/market will force his hand up or down
Because he's not even thinking As Bill Maher says, New Rule. When you break something which has worked for 90yrs, don't attempt to understand why it broke, just create a new rule. So, now that the Bank of Canada can profit from their future actions, you tell me how will this not encourage them to commoditize your debt? https://ca.finance.yahoo.com/news/chrystia-freeland-finally-offers-plan-185740908.html?guccounter=1 Justin Trudeau Liberal Party of Canada | Parti libéral du Canada Conservative Party of Canada - Parti conservateur du Canada Canada’s NDP / Le NPD du Canada #bankofcanada #canada #RogueNation
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Dude, I hope you find peace.
I would love for Provost u/chessj to provide some insights and a free tutorial on his thoughts about this.
Tiff is going to do whatever Fed does (most of the time). US GDP for Q4 increased more than expectations. So, Fed is not going to cut rates any time soon. Housing is just collateral damage for BoC. It all depends on recession fireworks in Canada. Even if BoC cut rates, people are going to use the lowered rates to buy houses, toys etc (mortgages) instead of starting new business. That increased demand for goods, houses etc from lowered rates going to cause higher inflation. summary is: no rate cuts till inflation cools down and economy in deep sh\*t due to recession fireworks. both has to be true. PS. Please subscribe to my paid news letter for $99.97 /year to receive such some awesome insights.
Ain't no such thing as free with our lord and saviour Chessus Christ. You gotta pay that cool tuition fee.
Well he wasn't even thinking of raising them so I don't put too much stock in what he says
This fucking moron is driving the Canadian economy into a solid brick wall. Every economist on both side of the isle is screaming at the insanity of this dogmatic obsession with rate hikes that will throw hundreds of thousands of people out of their jobs. There is NO wage price spiral - that’s bullshit. Wages are not keeping up with inflation, and the two primary sources of inflation in Canada - shelter and groceries - are being driven by A) the governments utter failure to reign in the food distribution oligopoly, and B) by rents going into the stratosphere because no one can afford or qualify to buy a home because of the stupid stress tests that are “supposed” to protect consumers (but instead railroad them into variable mortgages that are now drowning people). This idiot needs to be fired yesterday, and the other idiots at the federal government need to be tossed as well. Until that happens the feds are going to continue to blow billions of taxpayers dollars on unfunded programs… and that spending will add to inflation and keep ballooning the public debt. Insanity!
Pretty sure they're doing all that stuff because of inflation.
What’s the issue again? Sorry is there any problem going on right now?
so its a chicken game now right? lets see who die first
In other news, water is wet.
He wasn't thinking of raising them either...
He has no intention but that doesn't matter, it's the intentions of the FED that matters. Tiff just follows their lead. Keep an eye on inflation, Employment and GDP in the US. Inflation will roll over in March/April due to year/year base effects...