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End of an era ?
January 9, 2024
10:48 am
oltunde
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is it really the end of high GIC rates, look like rates going down weekly?

January 9, 2024
11:11 am
The Rock
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I think that rates for the most part will remain at 5% or above for the first half of 2024. I'd be surprised if they went down quickly.

January 9, 2024
12:00 pm
Dean
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oltunde said

"End of an 'Era' ?"

Historically speaking, it's more like a 'Hiccup'. sf-wink

Let's hope it lasts a little bit longer.

    Dean

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

January 9, 2024
12:13 pm
AltaRed
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Longer term GIC yields will "trend" with the bond yield curve for 2-5 year bonds, i.e. market sentiment, albeit not directly correlated. Bond yields have dropped considerably over the past 3 months or so but may hold now for awhile pending any new signals from BoC and/or inflation rate. 1 year term GICs will more closely correlate with BoC interest rate and short term Tbills whatever they may be.

Odds are, rates are more likely to trend down more this year than go up. That is probably as good as it gets for rolling the dice.

January 9, 2024
1:25 pm
Koogie
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An "era" umm.. the end of a good year or year and a half maybe at best.

Modern governments hate savers. The race will always be to the lowest possible interest rate to sustain minimal economic action. That allows them to issue debt and/or borrow cheaply to pay for their endless vote buying. Sorry, "spending"

January 9, 2024
3:19 pm
MattS
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The Rock said
I think that rates for the most part will remain at 5% or above for the first half of 2024. I'd be surprised if they went down quickly.  

5% feels like it’s on life support now..

January 9, 2024
4:54 pm
mordko
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Out of curiosity I looked at similar discussions in this forum from 2020. Here is a typical quote.

I do not see rates going higher in the next 5 years, at minimum. We will have sub-3.0% GIC rates for >= 5 years. As such, I've shifted my short-term bias to long-term in terms of GIC duration. sf-cool

Situation is volatile and different scenarios could play out. You can take it to the bank.

January 9, 2024
10:32 pm
Norman1
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The RDBA Broker Advantage Index indicates that deposit broker GIC rates peaked in early November last year.

January 10, 2024
7:00 am
MattS
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I suppose this is why we ladder because nobody knows for sure
When you have a strong opinion on something you can throw a little imbalances into your ladder to suit your own bias .

January 10, 2024
7:14 am
Alexandre
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Koogie said
An "era" umm.. the end of a good year or year and a half maybe at best.

Felt like an eternity.

Too much political pressure on BoC from all sides to drop rates, good times for us savers won't last.

Still, not locking for longer than a year, year and a half. See post #7 from mordko.
Also, I have personal foolproof backup plan in case rates drop dramatically a year from now to below what I need to balance my household budget.

January 10, 2024
7:14 am
savemoresaveoften
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mordko said
Out of curiosity I looked at similar discussions in this forum from 2020. Here is a typical quote.

I do not see rates going higher in the next 5 years, at minimum. We will have sub-3.0% GIC rates for >= 5 years. As such, I've shifted my short-term bias to long-term in terms of GIC duration. sf-cool

Situation is volatile and different scenarios could play out. You can take it to the bank.  

only 2y years wait if lock in to a 5y in 2020, except renewal will prob at the same time rates bottoms, oops.

But if the person who wrote that actually put the money where his money is, still RESPECT

January 10, 2024
12:29 pm
agit
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mordko said
Out of curiosity I looked at similar discussions in this forum from 2020. Here is a typical quote.

I do not see rates going higher in the next 5 years, at minimum. We will have sub-3.0% GIC rates for >= 5 years. As such, I've shifted my short-term bias to long-term in terms of GIC duration. sf-cool

Situation is volatile and different scenarios could play out. You can take it to the bank.  

no one knows ... by now we should know who wrote the above quote

IMO Central bank policymakers won’t cut for the sake of cutting unless something breaks

January 10, 2024
1:50 pm
mordko
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agit said

no one knows ... by now we should know who wrote the above quote

IMO Central bank policymakers won’t cut for the sake of cutting unless something breaks  

They’ll respond to data. Future data. Which we don’t have. Yes, right now the data is pointing to 5e economy cooling and everyone is predicting that the rates will fall. In 3 months time situation could change 180 degrees. Nobody really knows what will happen in 12 months. Lots of known and unknown uncertainties. CBs screwed up by being too dovish and not responding yo data once. They can’t afford the same mistake twice. And even if they do, it could end up in higher long term rates.

January 10, 2024
2:02 pm
savemoresaveoften
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agit said

IMO Central bank policymakers won’t cut for the sake of cutting unless something breaks  

FED officially indicated expected rate cut in 2024 in their last minute.
they are policymakers and also nothing breaks right now. So what gives

January 10, 2024
2:12 pm
Alexandre
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New York (CNN)

Treasury Secretary Janet Yellen highlighted in a speech on Wednesday cooling inflation and an economy continuing to defy recession predictions.

During an appearance in Boston, Yellen touted the fact that television prices are down by 28% from their peak, used cars and trucks are 11% cheaper and gasoline is down almost $2 a gallon since June 2022.

Yellen also pointed to data showing the typical middle-class American household has “more wealth, higher earnings and more purchasing power than before the pandemic.”

I needed a good laugh today. Thanks to people who told us "inflation is transitory," they never disappoint.

January 10, 2024
4:35 pm
BlueSky
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Alexandre said

I needed a good laugh today. Thanks to people who told us "inflation is transitory," they never disappoint.  

Must be the same clueless dude who declared the budget will balance itself.

January 10, 2024
5:02 pm
mordko
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What are we laughing about? Yellen is not that particular dude who can’t count. She may have been a little selective with her benchmarking but wages have been growing faster than inflation and asset prices went up. She is factually correct.

January 10, 2024
5:18 pm
Lodown
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Norman1 said
The RDBA Broker Advantage Index indicates that deposit broker GIC rates peaked in early November last year.  

Well that nails it. The BoC always follows what the banks do so the 1st rate cut by 30 March is now highly in the cards.

January 11, 2024
4:35 am
mordko
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^ A good example of faulty cause and effect.

January 11, 2024
4:49 am
savemoresaveoften
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Lodown said

Well that nails it. The BoC always follows what the banks do so the 1st rate cut by 30 March is now highly in the cards.  

BoC never follow what the banks do. It is the other way around. Always has and even now, and expect to so in the future.
The only debate should be whether BoC is now more prone to crate to political pressure or not.
If central banks just follow the banks and politician can easily influenced it, no one will trust our financial system or monetary policy.

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