Boc announcement of stopping rate hike true?

Jan 31st, 2023 10:23 am

#1

Dejavudiva [OP]: Member; Dec 8, 2020; 453 posts; 204 upvotes; Bc canada

Jan 31st, 2023 10:23 am

Boc announcement of stopping rate hike true?

Had company over in the discussion came up about the bank of Canada, announcing that they are going to be stopping the raising of the rates.

If this is true, someone mentioned that the house prices will go back. The logic, Rates go down house prices go up. Yet others keep talking recession and gloom and doom.

Which discussion would have more basis.

Jan 31st, 2023 10:28 am

#2

DaveTheDude: Deal Addict; Mar 3, 2018; 3084 posts; 3458 upvotes; GTA

Jan 31st, 2023 10:28 am

Bank indicated a pause in rate hikes until further data is available. But could raise again if data is not favourable. One thing they did indicate is no rate cuts are expected this year.

+2

Jan 31st, 2023 10:31 am

#3

cec4111: Deal Addict; Dec 17, 2013; 1492 posts; 983 upvotes; CALGARY

Jan 31st, 2023 10:31 am

BOC in their latest release gave an indication of rate pause. Those who are waiting for the meltdown should act as some action may kick in RE market. There might not be a huge price increases until the rates goes down but good listings would move fast.

+1

Jan 31st, 2023 1:44 pm

#4

seadog83: Deal Addict; Jun 19, 2007; 1131 posts; 1339 upvotes; Halifax

Jan 31st, 2023 1:44 pm

Why not read the releases yourself? They're easily available word for word. They implied they might stop raising them, but the BoC has said a lot of things that didn't turn out right, so who knows. Additionally its typically 1-2 years before you see the impact of higher rates, see how people seem to still be very employed, have excess cash to buy expensive bacon, and many people aren't feeling higher rates in their housing payments since they're locked in. As/If companies realize harder times aren't transitory and lay people off, people renew at higher rates, perhaps towards the end of this year, that's when BoC will reevaluate things. But honestly over the next 2 years, depending what economic data says, a case could probably be made for higher, lower, or similar rates.

I'm really blown away how poorly understood the concept of inflation is. Even if inflation went to 0 today, and stayed there, that means the bacon you bought for $5 a lb 2 years ago, but are now paying $8.50 a lb for, will stay at that price forever.

In terms of housing, the same house, for the same payment, but at 6% interest vs 2%, means that the price needs to come down close to 40%. That's to get to the same "affordability" that was present a year ago, which was amongst the worst ever both for Canada specifically, and internationally generally.

+5

Jan 31st, 2023 3:06 pm

#5

dc200: Deal Addict; Mar 30, 2010; 3642 posts; 2036 upvotes; Greater Toronto Area

Jan 31st, 2023 3:06 pm

The BoC (Bunch of Clowns) don't really know what they're doing, and their press releases are worth less than soiled toilet paper.

Yes, they've signaled an intent to stop the hikes, but no one really knows what the future holds with regards to rates.

RichmondCA wrote: ↑ Leading indicator on bear market, when you see this avatar start popping up in this thread

+5

Jan 31st, 2023 3:08 pm

#6

dc200: Deal Addict; Mar 30, 2010; 3642 posts; 2036 upvotes; Greater Toronto Area

Jan 31st, 2023 3:08 pm

seadog83 wrote: ↑ Why not read the releases yourself? They're easily available word for word. They implied they might stop raising them, but the BoC has said a lot of things that didn't turn out right, so who knows. Additionally its typically 1-2 years before you see the impact of higher rates, see how people seem to still be very employed, have excess cash to buy expensive bacon, and many people aren't feeling higher rates in their housing payments since they're locked in. As/If companies realize harder times aren't transitory and lay people off, people renew at higher rates, perhaps towards the end of this year, that's when BoC will reevaluate things. But honestly over the next 2 years, depending what economic data says, a case could probably be made for higher, lower, or similar rates.

I'm really blown away how poorly understood the concept of inflation is. Even if inflation went to 0 today, and stayed there, that means the bacon you bought for $5 a lb 2 years ago, but are now paying $8.50 a lb for, will stay at that price forever.

In terms of housing, the same house, for the same payment, but at 6% interest vs 2%, means that the price needs to come down close to 40%. That's to get to the same "affordability" that was present a year ago, which was amongst the worst ever both for Canada specifically, and internationally generally.

TL;DR: "no one knows anything".

RichmondCA wrote: ↑ Leading indicator on bear market, when you see this avatar start popping up in this thread

+2

Jan 31st, 2023 3:15 pm

#7

JayLove06: Deal Expert; Feb 29, 2008; 19643 posts; 18191 upvotes; Tarrana & The Ri…

Jan 31st, 2023 3:15 pm

Yes, some prices will never come back down. This is why BoC and Fed gov messed up royally. People don’t realize that yet. I also think we will see unemployment numbers escalate and yes, the housing market is in the middle of a crash. Not a correction. BoC will be late to course correct but it will be too late anyways. These fools really think if they overcorrect that it’s easy to fix. Bunch of idiots.

+2

Jan 31st, 2023 3:24 pm

#8

sircheersa: Deal Guru; Feb 22, 2011; 13766 posts; 17476 upvotes; Toronto

Jan 31st, 2023 3:24 pm

They said they will pause based on their inflation expectation.

A lot of people seem to want to downplay that but given their entire objective right now is to slow inflation and they came out and said this makes me think they are very confident about their projection. Most likely underselling it a fair amount.

As for impact on prices that's anyone's guess. My guess is market is flat for awhile, until rates are 1-1.5% lower probably end of 2024.

+2

Jan 31st, 2023 6:03 pm

#9

MrNobody: Jr. Member; Jan 31, 2014; 183 posts; 369 upvotes

Jan 31st, 2023 6:03 pm

There was a discussion recently where an investment advisor claimed that because money supply growth has slowed since the Fed started hiking interest rates, they should now stop and begin cutting at the end of the year.

At the other end was a former Fed governor who pointed out that even though money supply growth has slowed, the amount of money supply in the economy today is 2x what it was in 2019 before the crazy amounts of stimulus and money printing. That amount of total supply has barely changed since last March.

So in short, it seems that inflation will be with us for a long time, until the money supply gets back to the long term trend line, which is 50% lower from here.

What we need is not lower inflation, but outright deflation like what Japan experienced in the 90s and 2000s. That's the only thing that will improve Canadians' standard of living.

+7

Jan 31st, 2023 7:25 pm

#10

Piklishi: Deal Addict; Jul 25, 2015; 2145 posts; 1908 upvotes; Burnaby, BC

Jan 31st, 2023 7:25 pm

With the unlimited money supply and so much printing we will never see deflation. The only deflating thing I see coming is our CAD.

Jan 31st, 2023 8:36 pm

#11

jenneth: Deal Addict; Jan 5, 2018; 1973 posts; 1754 upvotes

Jan 31st, 2023 8:36 pm

Piklishi wrote: ↑ With the unlimited money supply and so much printing we will never see deflation. The only deflating thing I see coming is our CAD.

Sounds like...more inflation/

NOT A WOMAN. JUST GOT A WEIRD NAME. I AM A MAN. THANKS.

Jan 31st, 2023 9:52 pm

#12

bLuPhYrE: Deal Addict; Oct 26, 2007; 2751 posts; 2325 upvotes; YYZ

Jan 31st, 2023 9:52 pm

let's see what the fed does tomorrow.
25 or 50

if jpow comes out dovish markets will rally hard. 2-3%

Licensed Full Service Realtor

Mar 6th, 2023 12:34 pm

#13

Otakoo: Jr. Member; Nov 11, 2017; 199 posts; 191 upvotes; Wakkanai

Mar 6th, 2023 12:34 pm

What happened to RFD March 8 interested rate poll?

Is this the week Tiffany does the pause?

+1

Mar 6th, 2023 12:35 pm

#14

f00kie: Deal Addict; Oct 27, 2002; 1858 posts; 630 upvotes; Toronto

Mar 6th, 2023 12:35 pm

Otakoo wrote: ↑ What happened to RFD March 8 interested rate poll?

Is this the week Tiffany does the pause?

Too much fighting; it was closed.

+3

Mar 6th, 2023 12:36 pm

#15

sircheersa: Deal Guru; Feb 22, 2011; 13766 posts; 17476 upvotes; Toronto

Mar 6th, 2023 12:36 pm

That thread was kind of pointless there is a zero percent chance of anything other than holding this week.

+1

Mar 6th, 2023 12:39 pm

#16

Otakoo: Jr. Member; Nov 11, 2017; 199 posts; 191 upvotes; Wakkanai

Mar 6th, 2023 12:39 pm

sircheersa wrote: ↑ That thread was kind of pointless there is a zero percent chance of anything other than holding this week.

It was useful for gauging RFD (and general public) expectations, in order to plot a contrarian strategy.

+1

Mar 6th, 2023 12:47 pm

#17

JavierX: Member; Dec 4, 2017; 319 posts; 419 upvotes; Yonge Street

Mar 6th, 2023 12:47 pm

Possibly Tiffany's biggest week yet, and he won't be able to count on any guidance from RFD because of infighting and thread lock.

+11

Mar 6th, 2023 12:49 pm

#18

sherwoodRFD: Sr. Member; Aug 22, 2012; 546 posts; 557 upvotes; Mark Town

Mar 6th, 2023 12:49 pm

Recent CAD drop indicates no hike this time. and very likely no hikes any more.

Mar 6th, 2023 12:57 pm

#19

LordOfTheManor: Deal Addict; Apr 30, 2021; 2706 posts; 3370 upvotes; Rural Kanata

Mar 6th, 2023 12:57 pm

sherwoodRFD wrote: ↑ Recent CAD drop indicates no hike this time. and very likely no hikes any more.

CAD losing 2% value in the last month will have no effect on inflation numbers?

+1

Mar 6th, 2023 2:00 pm

#20

Middal: Banned; Jan 25, 2023; 44 posts; 42 upvotes

Mar 6th, 2023 2:00 pm

LordOfTheManor wrote: ↑ CAD losing 2% value in the last month will have no effect on inflation numbers?

How bad was inflation when CAD was $0.60?
And how much did it improve when CAD went to par?

More expensive imports also means more desirable exports. Rather than raise prices locally companies can take advantage of US market