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Bank of Canada Rate Decision December 2021
December 8, 2021
9:00 am
Vatox
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Holding rates for now, but January could be the first hike.

https://www.bankofcanada.ca/2021/12/fad-press-release-2021-12-08/

December 16, 2021
6:17 am
COIN
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Bank of England increased their rate from 0 to .25% overnight so I think the trend to higher rates have started.

December 16, 2021
9:38 am
Vatox
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COIN said
Bank of England increased their rate from 0 to .25% overnight so I think the trend to higher rates have started.  

That is a very bold move considering how much COVID-19 has been a problem for Britain. It’s been far worse than in Canada. They must be trying to manage inflation. Perhaps Mark Carney wore off on them.

December 16, 2021
10:24 am
Loonie
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and Boris Johnson is desperate to stay in office. There are many calls for his resignation.

Yes, covid is out of control over there. My cousin, husband and daughter there all caught it despite hyper-vigilance, even before omicron. And now she has long covid. These are people under 50.

December 16, 2021
12:33 pm
Dean
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Vatox said

Thanks Dean, but let’s stay away from individual citizen choices and focus on what can be done with the mechanisms available.
  

Unfortunately, some citizens choices are throwing wrenches in the mechanisms available.

    Dean

sf-cool " Live Long And Prosper " sf-cool

December 16, 2021
12:52 pm
Vatox
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Dean said

Unfortunately, some citizens choices are throwing wrenches in the mechanisms available.

    Dean

  

That’s true, but it’s what we have. Getting upset about it doesn’t help.

We are actually talking about finances here anyways. Central Bank interest rates, Inflation, cost of living, job numbers and the recovery, the health of businesses, etc.

Just focus on the best methods that don’t include criticizing individual choices.

December 16, 2021
2:05 pm
mechone
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I don't believe .25 rate increase will do anything rates need to be raised in .5 increments, which I believe the US feds will do early next year and have said 3 rate increases are coming

December 16, 2021
3:53 pm
AltaRed
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Just starting a trend has some psychological effect. A simple 25bp doubles the cost of short term paper but only moves variable mortgage rates 10-20% or so. A few of those in succession will get attention.

December 16, 2021
4:01 pm
Vatox
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mechone said
I don't believe .25 rate increase will do anything rates need to be raised in .5 increments, which I believe the US feds will do early next year and have said 3 rate increases are coming  

I’m thinking the same. But it’s even better to just start lower earlier. It can always be increased or decreased at any time, so it just needs to get started, period. I would have liked 25 points increase in September and if nothing improved then another right now. The longer they wait, the harder it gets.

December 16, 2021
4:21 pm
mechone
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Vatox said

I’m thinking the same. But it’s even better to just start lower earlier. It can always be increased or decreased at any time, so it just needs to get started, period. I would have liked 25 points increase in September and if nothing improved then another right now. The longer they wait, the harder it gets.  

100% agree

December 16, 2021
4:48 pm
Loonie
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AltaRed said
Just starting a trend has some psychological effect. A simple 25bp doubles the cost of short term paper but only moves variable mortgage rates 10-20% or so. A few of those in succession will get attention.  

This seems to be true.

I am just reading The Tipping Point by Malcolm Gladwell. It's one of his older books, and I think those are generally better. Discusses what gives trends legs. I am not very far into it yet but seems worth thinking about.

Most recently we have seen governments and media give the impression that covid was almost over. I believe Ontario Premier Ford intended to be done with it by about March after following various predicted steps. Then people believed them because they wanted to. in my view, there has never been the evidence to support this. It was all wishful thinking. And now look at us.sf-cry
People will run with the message they've been waiting for.

December 16, 2021
5:53 pm
BlueSky
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Loonie said

Most recently we have seen governments and media give the impression that covid was almost over. I believe Ontario Premier Ford intended to be done with it by about March after following various predicted steps. Then people believed them because they wanted to. in my view, there has never been the evidence to support this. It was all wishful thinking. And now look at us.sf-cry
People will run with the message they've been waiting for.  

I tend to agree with your assessment, Loonie. I will go one step further and suggest that in the current situation, we will be in many more lockdowns/restrictions due to new variants, new strains, and what not, up to a point when a "super vaccine" will be introduced that will target the core of the Corona Virus. Perhaps then, we will be very “happy” with the good 'ole seasonal flu virus.

December 16, 2021
8:58 pm
mordko
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Loonie said

This seems to be true.

I am just reading The Tipping Point by Malcolm Gladwell. It's one of his older books, and I think those are generally better. Discusses what gives trends legs. I am not very far into it yet but seems worth thinking about.

Most recently we have seen governments and media give the impression that covid was almost over. I believe Ontario Premier Ford intended to be done with it by about March after following various predicted steps. Then people believed them because they wanted to. in my view, there has never been the evidence to support this. It was all wishful thinking. And now look at us.sf-cry
People will run with the message they've been waiting for.  

In economic terms, it just might still be over. As long as the boosters are rolled out and ICUs can cope. Anything’s possible, of course, but I doubt we would be shutting down the economy again.

December 16, 2021
10:51 pm
Vatox
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mordko said

In economic terms, it just might still be over. As long as the boosters are rolled out and ICUs can cope. Anything’s possible, of course, but I doubt we would be shutting down the economy again.  

The economy is secondary, I’m quite sure lockdowns will happen should Omicron begin to overwhelm the healthcare system. They are talking about circuit breakers right now.

December 16, 2021
11:10 pm
Norman1
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Businesses don't need to wait for the lockdown order from the government. They can lock themselves down right now.

The National interviewed one restaurant owner who did just that. The consequences of a breakthrough Omicron infection for her and her staff are just too high.

The owner said she looks after her elderly mother. She doesn't have a backup should she catch Omicron and has to self isolate for two weeks from her mother.

One of her staff is a single mother of a three year old who cannot be vaccinated yet. Should the mother catch Omicron and has to self isolate from her three year old for two weeks, there isn't a partner to look after the child.

December 17, 2021
2:58 am
mordko
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Vatox said

The economy is secondary, I’m quite sure lockdowns will happen should Omicron begin to overwhelm the healthcare system. They are talking about circuit breakers right now.  

Its a cost-benefit type of issue. Another involuntary lockdown; the kind that would shrink the economy by a quarter would cause a lot of hardship. Not to mention major impacts on kids and young people as well as further acceleration in inflation plus long term debt burden.

As long as the hospitals are coping, lockdowns should be avoided. And hospitals will likely cope (my wild guess).

December 17, 2021
4:44 am
savemoresaveoften
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My thinkings are Ford will avoid another full scale mandatory lockdown unless it is clear ICU will be overwhelmed and lockdown is the only "possible" way out. With vaccinations esp the young on the climb, I certainly hope that scenario will not materialize. The economic cost of the lockdown is just too huge to justify each time its needed.
On the bright side, if it is indeed confirmed that while omicron is 70 times more infectious, as long as those infected (esp fully vaccinated) are mostly mild symptoms, it will speed up the global herd immunity. Looking back, it makes me more amazing that SARS rose and dead in such a spectacular fashion ! Too bad covid is a different animal.
Lets stay safe and reduce exposure to crowded places, etc.

December 17, 2021
11:59 am
Norman1
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Unfortunately, the factors interact together.

If Omicron is 70X more infectious and only causes 1/10 of the severe cases, then it will result in 7X the severe cases as the Delta variant.

Right now, the hope that Omicron is less severe is fading. South Africa, with 90% of population previously infected and/or vaccinated, is starting to show increasing hospitalizations.

Denmark's experience is quite worrying. There, Omicron is about the same severity as Delta. With Omicron's higher infectiousness, that points to a disaster is on its way there.

December 17, 2021
12:45 pm
Vatox
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Something tells me interest rates won’t be going up in January. With Christmas gatherings, higher infections will likely stall rate hikes. So it looks like more inflation pounding.

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