Reducing interest rates would be preceded by either messaging beforehand to allow the market to digest the pivot in an orderly manner (keep in mind that even when it was clear to everyone including central banks that immediate and aggressive tightening was needed.they still spent months beforehand telling people what they were planning to do). Either that or a dramatic event or shift in data that flags the need for a reaction.
Nobody knows the future, but lowering rates this week seems like it would be such a random and bizarre call.
Show me someone who’s income is directly tied to economic growth.
Actual inflation is way higher than reported. 99% don’t have incomes that keeps up with stated inflation.
At best it’s a delay, and not enough to keep up. But it’s alwsys delayed and not enough.
Wages grew faster in 2023 than inflation. We've been pretty close to 4% wage growth for almost a year now.
https://tradingeconomics.com/canada/wage-growth
Do you feel far better off than 5 years ago?
Do people you know sound like they’re being successful and comfortable financially?
Do you understand how awful CPI is of s true affordability indicator?
> A cherry picked year isn't representative of what happened the last 5 with inflation, **even if you believe the stated numbers**
I'm not looking to get into a discussion about the "real" inflation. You claimed that even the stated numbers show wages behind inflation. I posted the stated numbers to show that isn't true.
> Do you feel far better off than 5 years ago?
Yes. By quite a bit, actually, even though I don't make huge money (under 6 figures). Got good raises, watched my spending, and have been able to significantly increase my savings rate to the point where I am realistically looking at early retirement this decade which did not seem realistic 5 years ago. My main pain point is costs for pet care since insurance and vet costs have risen much faster than inflation.
Everyone's situation will differ, of course.
> Do people you know sound like they’re being successful and comfortable financially?
Yes. Many of my (still working) friends and also my co-workers who are all making a fair amount more than they were 5 years ago. I assume my retired neighbours are suffering somewhat from inflation but most of them sold their homes in the last few years and moved away already and so had a pretty good-sized nest egg to work with.
Why would the BoC risk the progress they’ve made in restoring price stability by reducing rates?
There isn’t sufficient data at this time to support a rate cut. Cutting too soon would also reduce the runway for further cuts in the event of an economic downturn and risk public confidence in monetary policy.
In the event of an economic downturn? We're arguably already there. Inflation is plummeting, unemployment is up, and GDP is barely above recession levels despite adding 1M+ people to the economy...
Nah... Why would you want that? It'll just cause a huge spike, starting with housing, and a year from now we'd be mega, super duper up poop Creek without a paddle.
Keep the rates were they are!
As this is an investment subreddit, I am happy collecting my 5% in a high interest savings account. lol.
Rates goes down and inflation goes up. No one wants to see stagflation.
I would say definitely not. They’re holding. Still almost at 3 percent inflation which is above the intended 2 percent (though that’s only a ball park). I actually don’t think they’re cutting this time or next IMO unless something substantially negative changes. I
3 months ago, OP was boasting about how much $ they were making in trading and now they are broke. On top of that, they are explaining why rates shouldn’t be @ 5%. Some people never learn when to STFU and listen.
>It's not like 4.75% won't subdue inflation.
The issue is not the 0.25%, the issue is that stupid greedy people will take it as permission to do stupid greedy things. Don't focus on just the numbers, focus on the intelligence of the average Canadian.
You need to think not “0.25% decrease can also subdue inflation” but “what would a 0.25% decrease indicate to the market and how would it react?”
And the answer imo is that a surprise lowering of the rates that literally no one in the market expects would cause the market to act counterproductive.
5% has been the avg interest for decades if not centuries when looking at past economies. We've been fooled to think 2 to 3% is normal, sorry it's not : |
> Imo we obviously don’t need 5% …
No one cares what a dumb Redditor, that’s is trying to push their opinion disguised as a question, thinks. Let the grownups talk and learn. 5% is just above neutral by historic standards and it won’t move down unless inflation is WAY below 2%. BoC won’t take any risks.
No. Sorry. Not this year at all, and possibly not next year. The second wave of inflation has already begun. I track my grocery bill closely and it's up month to month.
Frankly, I suspect that by the end of the year rates will be higher than now as the Fed and BoC battle the second wave of inflation.
Look at history, friend. Inflation always comes in waves. We're perfectly reproducing what was seen in the 70s. By the end of the year CPI might be upwards of 10%.
If you have debt, sell while you still can:
https://www.youtube.com/watch?v=rm8K37TIJOw
Lmao.
Wrong predictions aside, if you believe inflation will be high, why would you sell to offload debt? A period of high inflation is the best time to have debt.
I doubt it will be this week, but they should IMO. I know it's not a popular opinion, but high interest rates is inflationary right now IMO. WIthout mortgage interest costs, inflation is under 2%.
And also, it makes it tougher (more expensive) for companies/suppliers to produce goods and services, so they have to charge higher, and they can, because the demand is still high enough. It's not like people will stop eating food or will go live in the streets.
fuuuuuuck no. given the latest GDP and inflation readings they’re probably not going to till the back half of the year:
they don’t care if they flush the leverage out of the real estate sector. it’s long overdue.
No but if ask your real state agent then yes
This is the Canadian way!
Ha ha, very true.
Signs point to them holding.
What signs
https://www.m-x.ca/en/trading/tools/canadian-interest-rate-expectations
So that shows 17% probability of -0.25 while markets expect hold?
That says 93% probability of -1.25% by June
2025 not 2024
You think people here read? Naw man, real estate to the moon!
Street signs, construction signs, even the big billboard signs.
Signs signs, everywhere’s there’s signs.
Reducing interest rates would be preceded by either messaging beforehand to allow the market to digest the pivot in an orderly manner (keep in mind that even when it was clear to everyone including central banks that immediate and aggressive tightening was needed.they still spent months beforehand telling people what they were planning to do). Either that or a dramatic event or shift in data that flags the need for a reaction. Nobody knows the future, but lowering rates this week seems like it would be such a random and bizarre call.
>orderly manner Realtors: 🚀🚀🚀
Why the downvotes
Nah, she’s gonna hold.
No - the future.
You’ll be a lot broker if we endure more time where inflation outpaces income growth.
Does income still grow in Canada? I thought the companies / government found a way to squash that...
You’re not wrong. Show me someone who’s wages keep up with inflation and I’ll show you real inflation vs stated.
Isnt wage growth a component of inflation? The BOC is trying to suppress all economic growth.
Show me someone who’s income is directly tied to economic growth. Actual inflation is way higher than reported. 99% don’t have incomes that keeps up with stated inflation. At best it’s a delay, and not enough to keep up. But it’s alwsys delayed and not enough.
Wages grew faster in 2023 than inflation. We've been pretty close to 4% wage growth for almost a year now. https://tradingeconomics.com/canada/wage-growth
A cherry picked year isn't representative of what happened the last 5 with inflation, even if you believe the stated numbers
We're discussing an ongoing situation and you think me referring to the most recent year's data is cherry-picking data? Really?
Last 5 years: * [inflation](https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=1810000401&pickMembers%5B0%5D=1.2&cubeTimeFrame.startMonth=01&cubeTimeFrame.startYear=2019&cubeTimeFrame.endMonth=01&cubeTimeFrame.endYear=2024&referencePeriods=20190101%2C20240101): **+18.5%** * [average wage](https://www150.statcan.gc.ca/t1/tbl1/en/cv!recreate.action?pid=1410032001&selectedNodeIds=2D1,3D4&checkedLevels=0D1&refPeriods=20190101,20240101&dimensionLayouts=layout2,layout2,layout2,layout3&vectorDisplay=false): **+23.5%**
Dude, no.
Do you feel far better off than 5 years ago? Do people you know sound like they’re being successful and comfortable financially? Do you understand how awful CPI is of s true affordability indicator?
> A cherry picked year isn't representative of what happened the last 5 with inflation, **even if you believe the stated numbers** I'm not looking to get into a discussion about the "real" inflation. You claimed that even the stated numbers show wages behind inflation. I posted the stated numbers to show that isn't true.
Pardon me, lost track of who I was responding to
> Do you feel far better off than 5 years ago? Yes. By quite a bit, actually, even though I don't make huge money (under 6 figures). Got good raises, watched my spending, and have been able to significantly increase my savings rate to the point where I am realistically looking at early retirement this decade which did not seem realistic 5 years ago. My main pain point is costs for pet care since insurance and vet costs have risen much faster than inflation. Everyone's situation will differ, of course. > Do people you know sound like they’re being successful and comfortable financially? Yes. Many of my (still working) friends and also my co-workers who are all making a fair amount more than they were 5 years ago. I assume my retired neighbours are suffering somewhat from inflation but most of them sold their homes in the last few years and moved away already and so had a pretty good-sized nest egg to work with.
Make sure you give back the excess to your employer.
Zero chance.
Why would the BoC risk the progress they’ve made in restoring price stability by reducing rates? There isn’t sufficient data at this time to support a rate cut. Cutting too soon would also reduce the runway for further cuts in the event of an economic downturn and risk public confidence in monetary policy.
In the event of an economic downturn? We're arguably already there. Inflation is plummeting, unemployment is up, and GDP is barely above recession levels despite adding 1M+ people to the economy...
No but if you look at the month over month inflation, good chance it’s close to 2% in the next three months giving them cover.
Hells to the no
Nah... Why would you want that? It'll just cause a huge spike, starting with housing, and a year from now we'd be mega, super duper up poop Creek without a paddle.
But their houses will be worth sooooooo much more on paper.... which will mean nothing.
Wayyy to early for them to bring it down imo, maybe by year end but who tf knows
It's going down in April. Wait and see
[удалено]
Why? You seem to already have one.
June.
Keep the rates were they are! As this is an investment subreddit, I am happy collecting my 5% in a high interest savings account. lol. Rates goes down and inflation goes up. No one wants to see stagflation.
Let me ask the magic conch shell
I would say definitely not. They’re holding. Still almost at 3 percent inflation which is above the intended 2 percent (though that’s only a ball park). I actually don’t think they’re cutting this time or next IMO unless something substantially negative changes. I
3 months ago, OP was boasting about how much $ they were making in trading and now they are broke. On top of that, they are explaining why rates shouldn’t be @ 5%. Some people never learn when to STFU and listen.
.25 basis points by September 2024, and another .25 basis points by December 2024. Anything but that is a surprise.
Yep. If some of these "over-extended" are lucky, maybe July.
I think they hold, which is fine.
>It's not like 4.75% won't subdue inflation. The issue is not the 0.25%, the issue is that stupid greedy people will take it as permission to do stupid greedy things. Don't focus on just the numbers, focus on the intelligence of the average Canadian.
You need to think not “0.25% decrease can also subdue inflation” but “what would a 0.25% decrease indicate to the market and how would it react?” And the answer imo is that a surprise lowering of the rates that literally no one in the market expects would cause the market to act counterproductive.
5% has been the avg interest for decades if not centuries when looking at past economies. We've been fooled to think 2 to 3% is normal, sorry it's not : |
Nah. Try fall 2024 or spring 2025.
hold
Not a chance
Lol, keep dreaming
I hear yea I'm paying an extra $700 a month mortgage
In March or even April? No way on God's green earth.
> Imo we obviously don’t need 5% … No one cares what a dumb Redditor, that’s is trying to push their opinion disguised as a question, thinks. Let the grownups talk and learn. 5% is just above neutral by historic standards and it won’t move down unless inflation is WAY below 2%. BoC won’t take any risks.
No. Sorry. Not this year at all, and possibly not next year. The second wave of inflation has already begun. I track my grocery bill closely and it's up month to month. Frankly, I suspect that by the end of the year rates will be higher than now as the Fed and BoC battle the second wave of inflation.
😂
Look at history, friend. Inflation always comes in waves. We're perfectly reproducing what was seen in the 70s. By the end of the year CPI might be upwards of 10%. If you have debt, sell while you still can: https://www.youtube.com/watch?v=rm8K37TIJOw
Lmao. Wrong predictions aside, if you believe inflation will be high, why would you sell to offload debt? A period of high inflation is the best time to have debt.
If it’s fixed. But in Canada most people are only fixed for short terms.
I doubt it will be this week, but they should IMO. I know it's not a popular opinion, but high interest rates is inflationary right now IMO. WIthout mortgage interest costs, inflation is under 2%. And also, it makes it tougher (more expensive) for companies/suppliers to produce goods and services, so they have to charge higher, and they can, because the demand is still high enough. It's not like people will stop eating food or will go live in the streets.
No. Try June.
No
Not a chance. Check WCI container rates, Canadian GDP, etc. Too many systemic factors keeping inflation risks simmering.
Not going down until around July I'd say based on pretty much nothing
fuuuuuuck no. given the latest GDP and inflation readings they’re probably not going to till the back half of the year: they don’t care if they flush the leverage out of the real estate sector. it’s long overdue.