BoC will wait longer than market thinks to cut rates. But it will cut more than expected
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- Опубликовано: 1 май 2024
- David Rosenberg, Founder and President at Rosenberg Research and Ed Devlin, Founder, Devlin Capital, Senior Fellow, C.D. Howe Institute.; Former Head of Canadian Portfolio Management, PIMCO join BNN Bloomberg to discuss central banks' path forward. They also discuss what a weaker loonie could mean to the BoC's path ahead.
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I see the rising interest rate as a very big problem, as more investors will definitely pull out more money from the Stock market. This might have worked when I was still invest-ing with a couple thousand dollars, but it is more difficult now to decide whether to pull out more than $365k from my port-folio. I know some inves-tors still make that despite the strong bear market. In wish I could pull that feat
I think the whole thing about holding stocks for long term will always apply. So I think you should get a quality broker who is able to analyze and pick stocks that will do well in the long term, else you will be in a long bear ride.
You have a very valid point, I started investing on my own and for a long time, the market was really ripping me off. I decided to hire a broker, even though I was skeptical at first, and I beat the market by more than 9%. I thought it was a fluke until it happened two years in a row, and so I’ve been sticking to investing via an analyst.
This sound interesting. I’m not really one to use pro analysts, but I guess it would not hurt to try one. My portfolio is in the red waters right now
Certainly, there are a handful of experts in the field. I've experimented with a few over the past years, but I've stuck with ‘’Melissa Terri Swayne” for about five years now, and her performance has been consistently impressive.She’s quite known in her field, look-her up.
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We DO NOT need rate cuts in Canada right now.
Good luck avoiding job loss when the economy turns for the worse.
You might loose your job if interest rate stays high for long
JAG, we 100% DO NEED A RATE CUT RIGHT NOW IF NOT BACK IN APRIL.
@@kamenidriss It's already turned. The BoC will be late to the rate cut party and a lot of people will be out of work or have lot their homes before Tiff pulls the stick out of his butt.
maybe you don t but you dont speak for the rest of us.
2% inflation is not the target. It’s the ceiling. Inflation should be well below 2% before cutting.
Why do you say that larry?
It's almost impossible to maintain inflation below 2% for very long and zero evidence that 2% is even good for long-term economic activity. 2-3% is a reasonable range but central bankers have hard-ons for 2% for some idiotic reason.
David needs rates to come down to help his mortgage book.
Yep😂
What a bang up job our Liberal coalition leadership and the BOC are doing! Just hitting it out of the park. We need 15 and 30 year mortgage terms in Canada. Like the US. Mortgage renewals are going to shock a lot of people here. Further tanking consumer spending and GDP growth.
You can already get 15 year terms and 30 for first buyers. Amortization terms don’t help when there is a supply shortage. Anyone who can not afford rate increases of historically low interest rates, it is their own fault if they’re broke for over leveraging their income versus debt.
The idea that extending mortgage terms will somehow ease the pain is a fallacy. The added interest terms work out to tens or even hundreds of thousands over the term of the loan. The only winners are the wealthy, banks, and shareholders.
@@Chr1s-fm6biI think icecold0505 meant 15-30 years fix rate.
@@Chr1s-fm6bithe point is not stretching the payment over a longer amortization but having a stable payment over the whole term of the amortization.
@@colin4993 🤣 go run your numbers over the term of the loan.
get ready all restaurants and retail is already closed
I believe that the real reason these guys think rates should go down is because they are over leveraged. These rich idiots thought they could keep borrowing until the end of time. But it's time to pay your debts.
If you're not in debt, high interest means you get paid to save money, and that's a good thing.
high interest rates are sucking the blood out of our economy. and this applies to all residents of Canada. Perhaps you live on Mars?
They want cheap money to buy seven more houses each.
They're trying to "talk their interest rates down"
High home prices are destroying the Canadian dream for the next generation.
High interest rates mean more mortgage, high cost of running any business, people spend very less on leisure activities ( shopping, bars, resturants etc), buying things like cars etc....
You seem like someone who doesn't have any good investments or good income. So sorry for you
"We should strip out mortgage and interest rates"
Yes, lets strip out things normal people have, use, consume, and their biggest debt.
OK grandpa.
Look at the price of cars and houses. Keep the rates high. People are stupid and will continue to take out money like it's free.
Yep, $50,000 for a new car is like nothing these days.
@@24theMoneyI hope you all know deflation is far worse than inflation, especially when it comes to poor people. If you are not hoping for a deflation, then high rate is only gonna make the price go up slower, there is no going backwards.
F u! I'm about to lose my house when I have to renew my mortgage
We need to keep rates high for long to allow homes affordable to ordinary people.
If so, we will end up in a deep recession and ordinary person will only suffer more while rich people buy all good assets in a deep discount. So wake up please, China has already tried to kill their real estate market, at first, ordinary people were applauding like you, but soon they realized they were the ones got impacted most😂
The prices are not going down. On the contrary, they’re still going up like crazy, but now only the people who can afford the higher rates can buy them. And people in cheaper houses who wanted to upgrade are staying put.
@@josephsmith594 so glad there are still people who can think clearly like you. Everyone just crying for rate to stay higher for longer, no one sees it is coming for him or herself. High rate slows transaction which will lead to reduction in construction, unless the demand is gone, I don’t see the price will come down to the point majority could afford. The storyline will be either, people and businesses adapted to the high rate and the demand will slowly come back or, the market crashes and the interest has to come down like a big dive. Rich people won’t lose in any of these scenario as long as they are not overly leveraged, as far as I know, most rich people positioned themselves very well, with enough cash or cash equivalent, insurance and a large LOC ready for them to access. On the other hand, working class would suffer the most either way, case one, they will have to pay a lot more interest for their mortgage, which could squeeze their disposable income for other things; case two, they will very likely become unemployed and loss everything they have.
I’m confused by your statement. Keep rates high so the 75% of mtge holders , who happen to be ordinary people, who will have to renew over the next year, will not be able to carry their mortgages and lose their homes at a loss none the less so ordinary people can buy them at a lower price than the original ordinary people who now live in a tent???
There's a housimg shortage especially in GTA. Houses are once again selling over asking and selling in days
if BOC cuts rates before the FED, CAD will depreciate and costs of goods will go up(inflation).
Not with energy prices this strong. CAD rates is based on our commodities.
This guy since day one BOC interest rate hike he became a rate cut cheerleader and he was predicting housing bubble will pop many years ago but it didn’t happen!
The Canadian dollar will end up at .50 cents. To u.s. dollar
My sister and her family are going to Europe on vacation this summer. Paying full price, no hesitation. The inflation fire is still out of control.
Is it safe to say if the u.s. is not cutting, no one is cutting.
I have a few conversation with a few friends about inflation and interest rates have effect on a small business. We see mine and my friends' stores (a Swiss Chalet a Thai Cuisine, nail stores) have seen the business down more than 20% in the past few months a couple other small around the neighborhood shut down. Regular customers have been less show up, not many new customers. With the help of Federal & Provincial. We survive the pandemic but I am worried about the future of our businesses now. Small businesses kept the economy from going during financial crisis, will they be able now?
Yup
And that CEBA loan is killing business.
He doesn't think that inflation will increase if the bank decreases interest rates? REALLY?
Is there anyone here who thinks that house prices won't go up if interest rates are decreased?
Is there anyone here who thinks that Canadians won't start buying/leasing new cars if interest rates decrease?
Is there anyone here who thinks that Canadians won't go into more debt if interest rates decrease?
What is this guy even talking about? He keeps giving out all these numbers on "real inflation". Yeah, the reason why the numbers are what they are IS because of the higher interest rates. As soon as the rate is decreased, inflation will go up, especially if the US fed doesn't decrease their rates. The value of the cad dollar will go down which will decrease purchasing power, hence increase prices, hence inflation.
No. The bank has to hold out longer. We have to go through this pain now so that we don't get into worse pain later on.
The interest rates are hurting investments in productivity and supply. If they stay any longer we will create stag-flation which is far worse than a hyper inflation.
Every time I hear an economist speak of suggesting rate cuts, I look to $700k townhomes in Niagara and the multiple condos going up around me, and just shake my head.
I think these talking-heads purposely avoid reality on the street, for reasons I've yet to figure out.
Trude@u was throwing money left and right. why should we pay for this?
Look at all these inflated asset owners desperate for free borrowing again to bring back their cova fomo high life lol.
The reason is they won't interest rate cut is because the dollar will collapse to 50 cents. The economic gap between the US and Canada has a gap now in gdp that is huge.... But the currency hasn't moved....
The interest rate is keeping that currency high. When they cut, the currency will collapse, housing will take off because internationally, all homes are 25% cheaper.
Inflation will take off because we compete and share supply chain with the USA .. etc.
Forget it Rosie.... not happen'in.
If/when BoC rate cuts do occur in significant deviation from US Fed rate Policy..... it won't much matter anyways at that point as Inflation and Defaults will already be well underway.
For your information all those homeowners who held their assets this far , they will hold one more year. Your dream of housing crash is not happening. A little advice for people like you who are waiting for a crash, get into the market before it even get more expensive
@@alexramos9316 there is lot of fatigue out there , however even if they do cut interest rates the biggest obstacle I see is the new mortgage rules OFSI and cracking down on fake incomes .
Who the hell would qualify for a home if they can only borrow 4x their income.
They are not raising rates to protect our currency and bond market. and are pretty stuck if the us doesn’t lower rates.
I just don't get why disinflation or even outright deflation would be bad at this point. Prices went up so far so fast there should be some balance to it, especially in food.
There will be massive job losses. Collapse of the economy.
So uh, the place I live was the only place I could afford, 13 years ago, that is still the case.
When it collapses or when the city condemns it, I have only the street to move to.
Rent is double what I pay now, in the dirtiest, cheapest, dampest, most derelict basement unit in the city because of Ford's "market price" regulation.
Save for a down payment?
Been trying for 20 years.
What else you got?
Because, I have never missed a rent payment from the $125 000 in rent payments over the last 13 years.
Don't cut rates for 1 year. Save CAD
These guys have 0 bias. This is just straight truth & facts with no concern for their own upcoming renewals.
How can house prices go out of whack and the government of Canada and the real estate board allowed this to happen
BOC needs new governor.
Home prices are still unrealistic, so rates should not go down for several years; federal government must also ban foreign ownership and heavily tax investors.
too early to cut, The interest rates have not impacted the investors in 2020/2021 that gobbled up homes on cheap debt. hold or raise until spring 2027 to clean house..
Petty economics doesn’t work
Blah blah blah this David guy can say so much without giving any actual evidence of anything. The boc is part to blame for keeping interest rates low for too long. Inflation is not at 2 percent. Housing is an example of how irrational the prices have become. They want to see more pain. And in cycles usually a cut means detrimental effects of an economy. Our economy is fine.
GDP per capita is continuously dropping and in your estimation that’s fine?…🤦🏻♂️
Housing? What about food and gas
@@antiprogpragmatist859 our gdp per capita is based on the current regime letting everyone and anyone in. The boc is trying to normalize the lending and borrowing to sustainable levels, and of course government keeps spending.. Housing in Canada is too heavily invested but it doesn’t actual create income for the country. Other sectors where we should be focused on creating some real gdp is lacking. We don’t move down here. Canadians are lazy.
@@peej91 … gdp per capita has been decreasing for quite some time now.
@@startingwithnothing5423precisely. This David guys talking about how inflation is tamed enough and boc should start cutting already. What a joke
The issue is that Canada has to kiss ass with America or else.
Well I guess if china or someone can release Corona part 2 , then we can expect a good cut rate
How about that $53,000,000,000 of Additional New spending in the latest Federal budget. Not a chance of a rate cut anytime soon.
Mr Rosenberg, if you start removing items from CPI you can get any number you want to support your opinion. Why not to remove from CPI calculation 8 items with lowest inflation instead of removing 8 highest. As it is right now many people are expecting that CPI is manipulated and your arguments are just adding to that perception.
Bond market determines rates, all these politicians have no power in this department.
The biggest problem in the real estate is investers.ontarion needs real estate crash or big recession to fix housing affordability crisis.not a rate cut.
Rates need to stay high for atleast 5 years. People need to realize how expensive goods are again. This wont happen, as the banks are a debt buisness.
This guy is a CLOWN. we need rates to stay high
🍭🙋🐓
Inflation is pretty much gone? 😆
My call has been that Macklem will guess wrong as he always does and wait too long to cut. Tiff is an incompetent clown.
Wait too long? The only mistake is if he doesn't raise further. Too much stupid money still floating around.
I like rosie but i think he's early inflation is still hot and a cut is the spark that will restart the fire
High interest will instill discipline and stability.
hahahaha i hope they dont cut rates for a long time...if anything i want them to raise it
Look at all these non property owners screaming that we don't need rate cuts despite the economy being so weak
Look at all these home owners using their homes as ATM's because they were too blind to see the inflated wealth was artificial and will correct hard.
housing in gonna fall and you're gonna get wrecked with your overinflated mortgage lol
I dont own any property, but i dont understand this fantasy that somehow a housing crisis is going to benefit you all. If you think for a second that a housing crisis wont cause a recession and job loss for both you and your loved ones, think again.
I think now is a great time to position into long term bonds. Import to export parity isn’t that far off, so I wonder how far we can allow our dollar to fall. GDP is abysmal, and I believe h employment has been ticking up.
People are still offering above asking. And home prices are through the roof
Dec 2024
I don't know the government data all I know is my grocery went up an other 10% in 2 months...........
No to rate cuts!
They can't cut rates until the conditions exist that allow that to happen.
The conditions do not yet exist.
Who ever consented to Macklem? Who ever consented to the Bank of Canada over-issuing fiat Canadian currency?
be a rate hike before a rate cut
This just proves that Macklem is out of touch with reality while Powell is complacent.
Trude@u was throwing money left and right. Why should we pay for this?
They're fudging the numbers. Shelter inflation and food inflation is still double digits..
As in all things, we follow what the Americans do.
Reduce the interest rate please. I need to buy a second rental property
Shouldn't cut 9.95% prime rate should be
Carbon tax is inflation and high interest rate,
Rates are heading towards 10% sometime in 2025 as bond yeilds will spike out of control. PERIOD.
They are basing policy on a biased CPLie. If you included food, energy and housing real inflation is in the double digits. We need 12% interest rates or say hello to stagflation.
Finally, the truth!
Everything they say is about consumer confidence. It’s not based in facts
Is Canada facing the same fate of an economic disaster seen in the ballooning federal debts in USA ? Canada federal debts are ballooning at alarming rates, will Canadians be worse off for many years to come?
Price of houses blah blah blah. Everyone is focused on house price doubling. Wake up! Everything has doubled including gold which shows you our currency is half of what it was. They have to cut rates regardless of home prices or economy collapses and dollar tanks anyway. Rate cuts are coming and so are job losses so housing will stagnate anyway.
lol... BoC doesn't really need to do any actual work.. all they need to do is watch the FOMC, and then be like.. yeah we'll do whatever Jerome does....
More shows with this guy questioning what’s going on here. Why isn’t he there asking Macklin questions for Canadians
😢😢😢😢😢😢
All crooks
Making these predictions is insanity
He sure choked on “ inflation is dead “ Devlin has high hopes because he’s going broke ! Inflation is not dead the cost of living has skyrocketed and has not come down more hikes is needed
Daylight robbery
Started with 6 ✂️ this year lol....these analysts are a joke. Paid so much for being wrong.
All the comments coming out of there mouth are nonsense. They should wait till the spending from the recent budget shows up in the economy. Inflation is not dead yet. Unemployment is not high enough and people are still spending.
Maybe let’s stop with sending 100 billion to ukraine when we don’t have homes for refugees who come here as wanted criminals in their country and live with drug addicts which is totally legal to do in canada for some reason so yeah, let’s start there.
Rosenberg is frantically trying to sell his opinion hard - its coming off desperate like he needs cuts so badly. Never seen him so animated as in this interview. Rates need to stay or go higher. Sorry David, you're too self serving with your expert opinion.
😂 BoS😂
David’s so full of himself
David sounds like he’s pretty desperate for cuts!
Meanwhile the dumpster diving facebook groups grow...
Lies
Currently I'm just being smart and frugal with my money, I'm in the green 47% over the last 23 months and l've accumulated over $70K in pure profits from DCA’ing into stocks, ETFs, dividends and futures. However I’ve been in the red for a month now. I work hard for my money, so investing is making me a nervous sad wreck. I don’t know if I should sell everything, sit and just wait...
Stocks are pretty unstable at the moment, but if you do the right math, you should be just fine. Bloomberg and other finance media have been recording cases of folks gaining over 250k just in a matter of weeks/couple months, so I think there are a lot of wealth transfer in this downtime if you know where to look.>>
completely agree. I have been consistent with my profit regardless of the market conditions. I got into the market early in 2019 and the constant downtrends and losses discouraged me, so I sold off. I got back in December 2020 and this time with guidance from an investment adviser who was recommended by a colleague!!.
So much mansplaining happening here. sounds like sour grapes and someone is having a bit of a tantrum... 😅😅
tell us how you really feel... 😂