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Email this12:01 pm
September 29, 2017
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My response was a quote from a newsletter I received on Jan 17. My quoting it was simply to address your comment that "Everyone at the Fed has been saying...". Clearly not.
And of course, everything is always conditional. Even the quote uses the conditional "could".
That being said, my point was not to confirm what the Fed is or is not thinking or saying what they will do. I'm not here to argue that. My original premise always applies.
9:31 am
April 6, 2013
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Your original premise, that the Fed has been talking repeatedly about rates dropping another 100-200 pts by the end of this year, does not apply. Governor Waller's interview doesn't support that either.
You've either been dozing, as savemoresaveoften wrote, or are deliberately misrepresenting what the Fed has been saying.
12:12 pm
March 30, 2017
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smayer97 said
Well, the CBs behaved exactly as expected today. BoC dropped rate 25 pts and no more, just as the market allowed. But the Fed kept the rate steady, because there was less than 25 pts room, so they could not drop it at this time.This is a good example of how it is the market leading. The Fed has been talking repeatedly about rates dropping another 100-200 pts by the end of this year, but how did the markets respond? In like manner and followed suite? Nope. In fact, they went slightly up and flat short-term instead. And though not directly connected, even the long term markets shift up for a while. So who is leading whom?
Nevertheless, there is still a strong downtrend that has not yet been broken, so something to watch.
Would love to hear your thoughts re BoC announcement tomorrow. Since you claim BoC always follow the market, and market is pricing neither 100% on 0 or 25bps, so I guess BoC is panicking what to do ? 🙂
9:41 pm
September 29, 2017
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Actually, it is quite simple, and you do not need my opinion to figure it out...just look at the charts. The BoC will NOT change rates tomorrow...guaranteed, based on where the market is. This has been the case since the last BoC drop on Mar 12.
BTW, though it did not look like it would happen, the market moved down enough on Mar 5, confirming that the last drop would occur one week before.
All this was foreseeable from the market moves.
Also note that though the downward market trend has weakened, it still has not been broken, so the downside is still favoured, until proven otherwise.
As for the Fed, it was clear that it was not going to move the rate on Mar 19, as there has been no room to move since Dec 2024. And so far, except for one day, the market has given no room to go. So far, it looks like there will be no change on May 7 either.
7:37 am
April 6, 2013
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Not really. The rate decision could have gone either way. That's why swap markets were indicating closer to 50% and instead of 10% or 90%.
Bond traders and Bank of Canada can see that the economic indicators are mixed. Governor said last month that they will be more careful with future rate cuts. The cuts or increases will depend on which will end up being worse: inflation or recession.
10:15 am
January 12, 2019
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.
As some of us expected . . .
- No change ➡ https://www.bnnbloomberg.ca/business/2025/04/16/bank-of-canada-holds-key-interest-rate-at-275/
.
Dean
" Live Long, Healthy ... And Prosper! "
12:07 am
September 29, 2017
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In case you are wondering, Feds will not be changing their rate today; still no room in the market, not since Dec 18, 2024.
8:11 am
January 12, 2019
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.
You never Really know for Sure, until Powell sings ... but That's ⬆ the Consensus.
We'll soon know for sure today . . .
- Dean
" Live Long, Healthy ... And Prosper! "
11:01 am
January 10, 2017
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"Fed holds rates steady at 4.25-4.50% range"
12:23 pm
January 12, 2019
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Dean said
.
You never Really know for Sure, until Powell sings ... but That's ⬆ the Consensus.We'll soon know for sure today . . .
Dean
As expected . . .
.
Now we get to Wait & See what the BoC decides on June 4th.
Any Guesses ❓ 
- Dean
" Live Long, Healthy ... And Prosper! "
12:48 pm
September 29, 2017
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Lodown said
"Fed holds rates steady at 4.25-4.50% range"
Yup, held the rate exactly as predicted 3 weeks ago.
12:55 pm
September 29, 2017
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Dean said
As expected . . .
.
Now we get to Wait & See what the BoC decides on June 4th.Any Guesses ❓
Dean
Based on current market trend, the market could stay steady into about late Aug/Sep before deciding on direction. So, we could be in a holding pattern for a while. There appears to be a lot of wait-and-see posturing, though the overall trend is still downward. But since the market is currently well positioned to go in the opposite direction, I would call it neutral. Only time will tell how the market mood and forces will move.
1:18 pm
January 10, 2017
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The Canadian economy is doing poorly - we are still mostly a country of natural resources and we don't quickly invest in new technology to be more efficient like the US excels at doing. Over the last few years our GDP was supported by mass increases in temporary (students, seasonal workers, etc) and permanent immigration. This has now ended due to gov't imposition of immigration limits.
With this backdrop, if not for the imposed and threatened inflationary T2 Tariff's and Canadian counter-tariffs , a .25% cut would be a sure thing. The Tariff issue will not be settled within the next 28 days, so Macklem will, once again, hold off on any rate reduction until there is further clarity.
8:00 am
November 18, 2017
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Capital investment in machinery and equipment is one of the main lacks in sustaining Canada's manufacturing sector. The larger U.S. market can much more profitably make these investments, and then supply Canadian industry's needs too.
RetirEd
9:32 am
September 11, 2013
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Exactly. Canada is about 2% of world economy, our only neighbour in our area of the world about 25% of world economy, Canadian policy makers would be wise to base our economy on that unique reality for this country.
4:17 pm
August 30, 2023
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smayer97 said
Based on current market trend, the market could stay steady into about late Aug/Sep before deciding on direction. So, we could be in a holding pattern for a while. There appears to be a lot of wait-and-see posturing, though the overall trend is still downward. But since the market is currently well positioned to go in the opposite direction, I would call it neutral. Only time will tell how the market mood and forces will move.
@smayer97: So you think S&P will hit 5K again before going back to 6K or above?
5:25 pm
January 12, 2019
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Bill said
Exactly. Canada is about 2% of world economy, our only neighbour in our area of the world about 25% of world economy, Canadian policy makers would be wise to base our economy on that unique reality for this country.
But haven't we recently Painfully Learned that we were Fools to put most of our eggs into one international trading partner (in spite of the obvious Risks)❓
Have we Already forgotten that Hard/Excruciating Lesson❓❗
Apparently, for some ... Not 
- Dean
" Live Long, Healthy ... And Prosper! "
6:49 pm
September 11, 2013
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Incorrect reading of what I was implying, Dean.
If we, like almost everybody else, are pretty much irrelevant to behemoth USA it never made sense to base our entire economy on being so reliant on them, easy and apparently obvious as it was to do that. Long time ago policy makers should have realized that was a big risk, to essentially be an economic vassal to the world power, and should have made sure we developed significant trade with other countries around the world as well.
Nothing wrong with trading with USA where it's to our advantage, where it makes sense to cherry pick the obvious and good stuff, as RetireEd indicated, but it's always wrong to be as completely dependent as we are on any one country IF we claim to be more than a branch of that country, claim to be an independent state.
6:28 am
October 27, 2013
Online
I disagree the issue is policy. Canada already made the effort with the negotiation and formalization of CETA for example. It is our business and industry that has been lazy in making the effort to increase trade (both ways) utilizing CETA. The same principle can apply to the Pacific Rim but our business interests have to make the effort to secure actual trade.
One can lead a horse to water but if the horse refuses to drink, then bad on the horse. Or business leaders are failing at their jobs.
9:09 am
February 7, 2019
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AltaRed said
I disagree the issue is policy. Canada already made the effort with the negotiation and formalization of CETA for example. It is our business and industry that has been lazy in making the effort to increase trade (both ways) utilizing CETA. The same principle can apply to the Pacific Rim but our business interests have to make the effort to secure actual trade.One can lead a horse to water but if the horse refuses to drink, then bad on the horse. Or business leaders are failing at their jobs.
Absolutely correct. The Government of Canada has signed more Free-Trade Agreements than anyone else but businesses that actually do the selling find it so much easier to sell to US and MX customers. Exporting anywhere else means much longer supply chains, higher freight costs, different regulations and much more paperwork. So, selling to US businesses is generally more profitable and so much more comfortable. Until it isn't.
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