DATE

Steve Saretsky -

The Bank of Canada was back at it with their latest views on the direction for monetary policy. The latest dove at the helm, Tiff Macklem, signalled his commitment for a zero interest rate policy, and unprecedented levels of Quantitative Easing. Both interest rates and QE are here to stay, until the recovery is well underway, and that will take at least a few years. In other words, as Macklem so eloquently put it, “Interest rates are very low, and they’re going to be there for a long time. We recognize that Canadians, and Canadian businesses are facing an unusual amount of uncertainty, and so we have been unusually clear about the future path for interest rates. So If you’ve got a mortgage, or if you’re considering to make a major purchase, or you’re a business and you’re considering making an investment, you can be confident that interest rates will be low for a long time.” In central bank lingo, they call this forward guidance. On main street, we call it a green light to lever up on cheap credit. Borrow to your heart’s content. It’s a slippery slope, however. Canada currently ranks third amongst the G-20 in terms of private debt

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The Canadian Economy

Steve Saretsky -

The Bank of Canada was back at it with their latest views on the direction for monetary policy. The latest dove at the helm, Tiff Macklem, signalled his commitment for a zero interest rate policy, and unprecedented levels of Quantitative Easing. Both interest rates and QE are here to stay,...

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The Saretsky Report. December 2022