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When Will Rates Peak?
July 8, 2022
12:20 pm
COIN
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I think rates will peak in late 2022. Economy is already showing signs of slowing down.

July 8, 2022
12:29 pm
JohnnyCash
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COIN said
I think rates will peak in late 2022. Economy is already showing signs of slowing down.  

My guess, when inflation falls within the BoC's targeted range of around 2%.

July 8, 2022
12:39 pm
co
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The market currently expects US fed funds rate to peak in March/April of 2023 at 3.5%. CAD might be similar.

July 8, 2022
12:48 pm
Dean
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.
LOL ... this thread reminds me of a game we played at BD parties,
when we were kids . . .
.

.

Good Luck ❗ sf-laugh

    Dean

sf-cool " Live Long, Healthy ... And Prosper! " sf-cool

July 8, 2022
12:57 pm
COIN
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July 8, 2022
2:08 pm
Dean
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.
A much more recent 'Guess', from yesterday :

Sorry, that's all I've got right now ... I can't find my Crystal Ball. sf-wink

    Dean

sf-cool " Live Long, Healthy ... And Prosper! " sf-cool

July 8, 2022
5:24 pm
Bill
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If a recession comes is it inevitable that interest rates drop? I thought the "flation" part of stagflation meant that inflation during a recession could keep interest rates high, at least for a while - ?

July 8, 2022
6:04 pm
AltaRed
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Bill said
If a recession comes is it inevitable that interest rates drop? I thought the "flation" part of stagflation meant that inflation during a recession could keep interest rates high, at least for a while - ?  

It could if it is indeed stagflation. We can't be sure it will unfold this way, and most likely will not. Inflation with high unemployment is a specific animal that is not part of a normal business cycle.

July 8, 2022
8:50 pm
Loonie
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Are we in a "normal business cycle"?

July 8, 2022
10:16 pm
ExtraSauce
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I'll play ....

Rates will peak when US Fed and BOC whisper very first quiet words acknowledging we are in Recession, providing first inkling of possible interest rate easing and potential for stimulus to markets. Jawboning always prepares the ground for fear and greed in markets.

Please send my cash prize to the charity of your choice 😉

July 9, 2022
7:08 am
savemoresaveoften
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Depends on how high rates get to when recession materialize. My thoughts are CB will not be as quickly to cut, esp if they deem recession transitory, just like when they expected inflation to be transitory not too long ago 🙂

As long as unemployment stays low, need a deep recession to drag it to a level that CB deems aggregsive cuts are needed.

July 9, 2022
7:58 pm
RetirEd
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JohnnyCash: The Bank of Canada has forecast that inflation MIGHT be pulled back down to 4% in 2-4 years! Predicting the peak for rates is going to be a mug's game until the recession hits, and waiting for next year pretty dangerous, IMHO.

I'm going to keep watching for inverted yield curves, and lock in a chunk with each significant rate hike. I expect to complete my year's ladder by September.

No guarantees, but a bit of hedging...
RetirEd

RetirEd

July 10, 2022
7:52 am
agit
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Way to early to talk about the peak the rate just took off and is gaining altitude to reach Neutral Rate as clearly stated by BofC and the Fed. ECB just started.

"We may need to take more interest rate steps to get inflation back to target. Or we may need to move more quickly, we may need to take a larger step," said Governor Tiff Macklem at a news conference on June 9."

The C.D. Howe Institute Monetary Policy Council, also called on the bank to raise its key rate by three-quarters of a percentage point.

Fed officials indicated a series of increases that would take the funds rate to 3.4% this year, above the longer-run neutral rate of 2.5%.

Fasten your seatbelt and enjoy the ride until BofC and the Fed reach 3%

July 10, 2022
8:16 am
COIN
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"Fed officials indicated a series of increases that would take the funds rate to 3.4% this year,"

Will this all happen prior to the U.S. mid-terms in November?

July 12, 2022
10:07 am
Dean
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.
Meanwhile, back at the Ranch . . .

.
Hang on to your hats ❗

    Dean

sf-cool " Live Long, Healthy ... And Prosper! " sf-cool

July 12, 2022
4:53 pm
dougjp
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There's one thing history (including short term/the past 3 months) consistently teaches us, and that is the B of C is slow as a snail to respond. That goes for up and down rate change reactions.

Look at real estate sales/prices in the past 30 days, on the eve of another 75 bp increase. Now if, as expected, BOC laser focuses on the inflation rate % compared to the same month a year ago, ignoring most other things, we will be long into recession and stagflation before they think about admitting the error of their ways. Again.Just my 2 cents.

The main accomplishment of almost all organized protests is to
annoy people who are not in them.

July 12, 2022
5:54 pm
savemoresaveoften
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dougjp said
There's one thing history (including short term/the past 3 months) consistently teaches us, and that is the B of C is slow as a snail to respond. That goes for up and down rate change reactions.

Look at real estate sales/prices in the past 30 days, on the eve of another 75 bp increase. Now if, as expected, BOC laser focuses on the inflation rate % compared to the same month a year ago, ignoring most other things, we will be long into recession and stagflation before they think about admitting the error of their ways. Again.Just my 2 cents.  

I am pretty sure BoC already has the mindset that if it takes a mild recession (whether thru aggressive rate hike or other external factor) to tame inflation, they wont mind it at all. The keyword is whether its mild or a crash landing.

July 12, 2022
6:37 pm
lifeonanisland
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Great read. This is an opinion piece, but a very nicely-researched one. Definitely worth a read. https://financialpost.com/investing/interest-rates-are-still-rising-but-investors-should-start-preparing-for-when-they-come-back-down

July 13, 2022
7:03 am
cgouimet
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2022/07/13 BoC rate +1.0%, now @ 2.5% ...

CGO
July 13, 2022
7:06 am
RetirEd
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THIS JUST IN:

The Bank of Canada has popped for a larger-than-expected 1% base rate increase!

Let's expect some more investment opportunities soon - and perhaps recession on a nearer horizon.
RetirEd

RetirEd

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