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Why The Bank of Canada Won’t be Raising Rates Soon

Today I was at the dentist for a cleaning and checkup. (It doesn’t matter how old I get, it’s always nice to hear them say ‘no cavities’.) My dentist has nice TV’s at every chair, so I dialed in some BNN. I had a nice chat with my hygenist who said something along the lines of ‘do you understand the stock market?’

No, I don’t think I really understand investing in stocks. I suppose I understand enough to make an educated decision on when I need to find more information. But what she was really asking was if understand the markets. Do I understand economies? Yes, to her I do. I have a vested interest in how the local and global economies perform, who has jobs and how much they’re making. I care if the IEA changes the supply of oil and on most days I can tell you price of oil within a buck.

The reason that I know about things like that is two fold. First, I’ve always been curious about systems like the macro economic system that is our country. It’s part of why I took (and enjoyed) Econ 101 and 102. The second is that I’ve been listening to smart people analyzing the news and data available for almost 4 years. My favorite part of any REIN meeting is Don Campbell’s segment called “What’s Behind the Curtain”.  He goes through a bunch of recent news stories and research, and translates it into understandable, actionable bites. Peter Kinch is the same way, so I’m posting his great video today about why the BOC won’t be in a hurry to move rates. However, Mark Carney also spoke the other day about the damage super-low rates can have on the markets with respect to risk-taking, so he’d like to be able to move rates back to a more normal level. Peter does a great job of bringing several different stories and explaining why they all impact the ability of the BOC to move rates.

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