*Updated* Ongoing Bank of Canada Benchmark Rate Announcements

[DoubleF]

Originally Posted by Azure

With grain shortages coming, will be another boon for the Canadian economy and at the same time another excuse for Loblaws to drive up the prices again.

I welcome another price fixing class action lawsuit for bread.

[Azure]

Originally Posted by Slava

I'm curious...what would you have them do? If the price of oil goes up, do you expect that Petro-Canada is just eating that increase and keeping the price where it is?

They are blaming the increases on the suppliers, but they own many of the suppliers.

What I would have them do is have to compete against an open market.

Which of course we've had consecutive governments in place that have made sure that doesn't happen.

[belsarius]

Originally Posted by Azure

They are blaming the increases on the suppliers, but they own many of the suppliers.

What I would have them do is have to compete against an open market.

Which of course we've had consecutive governments in place that have made sure that doesn't happen.

Yeah, about 44 consecutive governments.

[opendoor]

Originally Posted by blankall

There are lots of non money supply related inflation pressures. Oil prices. War in Ukraine. Housing shortage. Supply chain issues. A lot of industries are still suffering from material shortages.

The labor shortage in China is going to change the way the world gets materials. With China's population shrinking and the cost of labor going up there, that will mean less goods coming out of China and prices going up across the board.

https://www.businessinsider.com/chin...economy-2023-2

The "end of globalization" is going to drive up costs. We're all going to have to get used to having less stuff for a while.

None of those things have anywhere near the impact of adding almost 40% to the money supply almost overnight like the US did (or 30% like Canada did), which is primarily what's driving current inflation as that money is still being absorbed. The price of oil went up 10x over a 10-year period in the '90s and '00s, but inflation never really got out of control then. And input costs for businesses have been dropping steadily for a year, so I don't really see that as a driver, at least near term.

Sure there will be other inflationary pressures, but they tend to largely even themselves out. So whatever cost increases come from deglobalization will probably be mostly offset by productivity increases through more automation, like they always are.

[blankall]

Originally Posted by opendoor

None of those things have anywhere near the impact of adding almost 40% to the money supply almost overnight like the US did (or 30% like Canada did), which is primarily what's driving current inflation as that money is still being absorbed. The price of oil went up 10x over a 10-year period in the '90s and '00s, but inflation never really got out of control then. And input costs for businesses have been dropping steadily for a year, so I don't really see that as a driver, at least near term.

Sure there will be other inflationary pressures, but they tend to largely even themselves out. So whatever cost increases come from deglobalization will probably be mostly offset by productivity increases through more automation, like they always are.

For sure. The huge inflation numbers we were seeing were 100% the result of increasing the money supply: almost free mortgages, bailouts, CERB, etc..

We're currently back down to 2.8%. Being unable to reach that goal of 2%, however, is likely to be a function of a lot of the non-money supply issues. Even without the increase in money supply, we'd likely be seeing some degree of inflation over 2%, with everything going on in the world.

I also disagree that you can simply do things cheaper with productivity increases. Made in USA/Canada products will always be more expensive than made in China products. There are certain products, where quality isn't all that big of an issue, and pure ability to produce in volume keeps costs down.

[chemgear]

https://www.cbc.ca/news/canada/briti...ment-1.6922140

Port workers in British Columbia have voted to reject a mediated contract offer, extending job action that prevented billions in goods from moving for almost two weeks earlier this month.

Its failure will give impetus to calls for the federal government to bring in back-to-work legislation, that came earlier from industry groups and politicians, including Alberta Premier Danielle Smith.

The earlier job action was serious enough that Prime Minister Justin Trudeau convened the government's incident response group to discuss the matter, an occurrence typically reserved for moments of national crisis.

[Fuzz]

Sigh, I had to check the date on that to see if it was a repeat...

[Yoho]

Won’t be suprised if rates continue to go up.

https://twitter.com/user/status/1690740246483238912

https://twitter.com/user/status/1690868334114623488

[Firebot]

Inflation jumped back up to 3.3% in July, higher than economists estimated.

https://www.cbc.ca/news/business/can...july-1.6936557

5 year Canadian bond have spiked back up above 4%.

South of the border retail sales rose more than expected.

https://finance.yahoo.com/news/july-...124255048.html

There seems to be a bit of a lull, with Goldman Sachs predicting the US to slash interest rates as early as next May, but this is betting on if inflation meets target.

https://finance.yahoo.com/news/fed-r...131518771.html

With gas prices climbing steadily in the past month, it's highly likely that inflation will be higher next announcement as well.

But hey grapes went down 40% MOM, go wild and splurge.

[opendoor]

August will be higher, because August 2022 was negative month-over-month (unlikely to happen again this year). I'd expect 3.5-3.6% for August, or even higher.

Still, it's basically entirely the side effects of rate hikes (i.e. mortgage interest inflation running at 31%) that's keeping it above the target range right now rather than market-driven inflation. If my math is right, headline inflation with mortgage interest excluded would be 2.2% and core inflation would be 2%.

[blankall]

Originally Posted by opendoor

August will be higher, because August 2022 was negative month-over-month (unlikely to happen again this year). I'd expect 3.5-3.6% for August, or even higher.

Still, it's basically entirely the side effects of rate hikes (i.e. mortgage interest inflation running at 31%) that's keeping it above the target range right now rather than market-driven inflation. If my math is right, headline inflation with mortgage interest excluded would be 2.2% and core inflation would be 2%.

If that's correct, without Russia, we'd probably be well below target inflation. A lot of experts were saying the inflation increase in July was largely due to oil prices.

It's also not just mortgage rates that go up with increased rate hikes but any kind of debt servicing. Businesses servicing small debt and passing it to the consumer, people financing cars, etc....

I do trust that the people at the BoC have taken this into account....but it's still worrying.

[blankall]

Originally Posted by Firebot

Inflation jumped back up to 3.3% in July, higher than economists estimated.

https://www.cbc.ca/news/business/can...july-1.6936557

5 year Canadian bond have spiked back up above 4%.

South of the border retail sales rose more than expected.

https://finance.yahoo.com/news/july-...124255048.html

There seems to be a bit of a lull, with Goldman Sachs predicting the US to slash interest rates as early as next May, but this is betting on if inflation meets target.

https://finance.yahoo.com/news/fed-r...131518771.html

With gas prices climbing steadily in the past month, it's highly likely that inflation will be higher next announcement as well.

But hey grapes went down 40% MOM, go wild and splurge.

That's hilarious. I bought some grapes the other day and was thinking to myself how cheap it seemed.

[Hot_Flatus]

Originally Posted by Firebot

Inflation jumped back up to 3.3% in July, higher than economists estimated.

https://www.cbc.ca/news/business/can...july-1.6936557

5 year Canadian bond have spiked back up above 4%.

South of the border retail sales rose more than expected.

https://finance.yahoo.com/news/july-...124255048.html

There seems to be a bit of a lull, with Goldman Sachs predicting the US to slash interest rates as early as next May, but this is betting on if inflation meets target.

https://finance.yahoo.com/news/fed-r...131518771.html

With gas prices climbing steadily in the past month, it's highly likely that inflation will be higher next announcement as well.

But hey grapes went down 40% MOM, go wild and splurge.

Everything I've heard to now is that further rate increases are unlikely to do anything positive at this point, and infact, history has shown that we are in line for substantial rate cuts within the next 6-8 months.

The Liberals need to step up and do something on a policy side of things to help....this is asking too much though as that would require getting off the fence for a few minutes. Even something as simple as a temporary carbon tax roll back at the pumps would go a long way in helping get over the final few hurdles if gas prices are truly the driving factor here.

[Yoho]

https://twitter.com/user/status/1691443852257742848

[chemgear]

Originally Posted by Hot_Flatus

Even something as simple as a temporary carbon tax roll back at the pumps would go a long way in helping get over the final few hurdles if gas prices are truly the driving factor here.

From this guy?

[opendoor]

Originally Posted by Hot_Flatus

The Liberals need to step up and do something on a policy side of things to help....this is asking too much though as that would require getting off the fence for a few minutes. Even something as simple as a temporary carbon tax roll back at the pumps would go a long way in helping get over the final few hurdles if gas prices are truly the driving factor here.

That doesn't make a whole lot of sense for a couple of reasons:

1) Gas prices are lower than they were a year ago, so they're not what's driving the current inflation number.

2) Any temporary reduction in taxes is basically a shell game where you lower inflation now but then increase it later when you add the taxes back in. It doesn't actually solve anything related to inflation other than temporarily making the numbers look better than they are.

[blankall]

Originally Posted by opendoor

That doesn't make a whole lot of sense for a couple of reasons:

1) Gas prices are lower than they were a year ago, so they're not what's driving the current inflation number.

2) Any temporary reduction in taxes is basically a shell game where you lower inflation now but then increase it later when you add the taxes back in. It doesn't actually solve anything related to inflation other than temporarily making the numbers look better than they are.

A year ago inflation was much higher than it was now. Oil prices are still way above the 5 years average now. So they are still contributing to inflation, just not as much as they were a year ago.

The idea with a temporary reduction in taxes is to deal with a temporary rise in oil prices. I don't see any government doing that though.

[opendoor]

Originally Posted by blankall

A year ago inflation was much higher than it was now. Oil prices are still way above the 5 years average now. So they are still contributing to inflation, just not as much as they were a year ago.

But inflation is a year-over-year number, so the inflation rate a year ago or oil prices 5 years ago mean nothing for it. All that goes into the number is the price in July 2022 vs. the price in July 2023. And because gas is still cheaper than it was last year at this time, it's not positively contributing to the inflation number. It's dragging it down, in fact; if you excluded gas from the CPI calculation, the inflation rate for July would have been 4.1% instead of 3.3%.

[blankall]

Originally Posted by opendoor

But inflation is a year-over-year number, so the inflation rate a year ago or oil prices 5 years ago mean nothing for it. All that goes into the number is the price in July 2022 vs. the price in July 2023. And because gas is still cheaper than it was last year at this time, it's not positively contributing to the inflation number. It's dragging it down, in fact; if you excluded gas from the CPI calculation, the inflation rate for July would have been 4.1% instead of 3.3%.

You don't look at the price just at a year ago. You look at the average over the year. Oil price also started to slide in May of 2022. So by 1 year ago, they were sliding. Any way you slice it, a month of increasing oil prices are going to add to inflation.

[pylon]

This is what I don't understand.

Mortgage interest costs have increased by 30.6 per cent in the past year. That's another record year-over-year gain, and the largest single factor in the increase in the overall inflation rate.

This is a direct result of the rise in interest rates, being used to bring down inflation. So your inflation taming tool, is the biggest factor in causing more inflation. Isn't this just the snake eating itself? It all seems like quite the scam at this point.

I'm on a variable and my mortgage could double and we'd still be fine. We wouldn't like it, but we wouldn't be on the street. We didn't buy over our heads. But some people in the entry market, had no choice. If they wanted a home to call their own.... they had to stretch to their limit, that or continue to overpay for rent. I feel for those people.

Is Tiff Maklem gonna go beat his meat for hours when thousands of people start losing their homes? Is this guy getting off on destroying families, putting people on the street and driving them into financial ruin? We had a guy on our street self delete a couple months back, and word through the grapevine was it was directly related to these interest rates. Covid caused him to skate a fine line as it was and these rates were the final nail in the coffin and ruined him financially.

I really think they need to pause for a good 6 months and let these rates sink in a bit.