"One reason we expect Canada's economy to contract in the fourth quarter is that its major trading partner, the U.S., is expected to decelerate sharply," said Sal Guatieri, a senior economist at BMO Capital Markets. "That will hit Canadian exports."
"The Bank (of Canada) has seemingly overestimated GDP growth for two quarters now, which implies that it is probably underestimating the impact of high interest rates on activity," said Stephen Brown - Well ya... ah duh...
The potential for further weakening in the Canadian economy is already evident in money markets. They have moved to price in a rate cut as soon as April after betting just last month that the benchmark rate would not be lowered from its current level of 5%, a 22-year high, before the end of 2024 and that the BoC may need to tighten further. - oops, sorry about that, we fucked up...
And if you have been following along, you will see that we have been kinda thinking along the same lines. I am not predicting anything, but really, you don't think the drastic rates are going to have any affect on the economy? And rates will keep going up...? Macro economics based on the numbers in one month, and the knee jerk reactions of the BOC are what have put us in this mess.
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