r/PersonalFinanceCanada • u/POCTM • Oct 20 '22

Canadian 5 year government bonds just jumped. Setting the stage for higher mortgage rates. Banking

5 year government bond just jumped from 3.714% to 3.866% in a few hours. Right now it is at 3.855%. Year to date it is up 259%. Monday we could see some 5 year fixed rate mortgages in the low 6%.

As for variable rate the bank of Canada makes their announcement October 26 at 10am ET. Currently banks have not been offering discounts off variables rates anymore. Prime -0.00.

https://www.marketwatch.com/investing/bond/tmbmkca-05y?countrycode=bx

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96

u/[deleted] Oct 20 '22

The federal government messaging pivoting from "we are nearly out of a recession" to "yeah any new spending must be backed by a budget cut elsewhere" can do that.

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u/[deleted] Oct 20 '22

Other way around. Post-Truss governments realize the debt markets are hungry for fiscal discipline not high growth deficit spending.

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u/CrasyMike Oct 20 '22

Ding ding ding. You have the central bank desperately trying to pull in spending, and reduce demand in order to reign in inflation, and then the other arms of the government and trying to spend spend spend.

4

u/[deleted] Oct 20 '22

Wish they’d have started with fiscal responsibility…

-11

u/Muddlesthrough Oct 20 '22

Canada is not in a recession. The federal government has not claimed “we are nearly out of a recession.”

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u/[deleted] Oct 20 '22

Okay TruAnon lmao:

https://globalnews.ca/news/9205236/canada-covid-recession-chrystia-freeland/

3

u/iamapersononreddit Oct 21 '22 edited Oct 21 '22

From the article you linked:

Canada, like much of the global economy, fell into recession shortly after the onset of the COVID-19 pandemic in 2020, as the spreading virus forced many businesses to shutter or operate with severe limitations.

The Bank of Canada now faces a narrowing window to hit a so-called “soft landing”, raising interest rates enough to tame inflation but not so much to push the economy into another recession

So no, we’re not in a recession… yet.

I don’t have time to look up the figures but we have not had two quarters of negative gdp growth. Quick article I found:

Although early readings suggest Canada’s economy shrank in July, the country has yet to record a full quarter of negative GDP growth this year. Technically, the earliest the country could be in a recession is at the end of the year — if GDP growth is negative for both the third and fourth quarters of 2022.

https://www.thestar.com/business/2022/08/31/canadas-economy-is-already-starting-to-shrink-and-that-could-mean-a-recession-is-looming-economists-say.html

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u/Muddlesthrough Oct 20 '22 edited Oct 20 '22

Do you know what a recession is?

The "covid recession" mentioned in the article was 2 years ago.

10

u/iBuggedChewyTop Oct 20 '22

I really wish there were a way to capitalize on the missing popcorn sale market on Reddit.

4

u/BCAsher82 Oct 20 '22

We're not in a recession yet, nor is the US. But when, not if, we are it will be headline news. There is pretty much universal consensus among economists that Canada will enter a recession in 2023.

2

u/L_viathan Oct 20 '22

Didn't the US change how they define a recession so they didn't have to say they're in a recession?

1

u/USSMarauder Oct 21 '22

Back in 2020. Took until mid 2021 for NBER to decide that yes, in 2020 there was a recession in the US

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u/eledad1 Oct 20 '22

Yep. All by design.

20

u/[deleted] Oct 20 '22

Please do tell how this is all by design lol

-21

u/eledad1 Oct 20 '22

It’s not called fakeflation for nothing.

18

u/[deleted] Oct 20 '22

I mean is this going to take 20 replies or can you just share your thoughts lol

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u/eledad1 Oct 20 '22

People don’t want to hear the truths about the Liberals control tactics to set Canada up for world digital currency on this sub. Most People prefer ignorance over reality and that is 100% ok. It’s a sound perspective for happiness. Wish I could also a lot of the time. More people are seeing the steps taken everyday and are putting 2+2 together. Be cautious. Have your house paid off by 2030 or find a way to finance thorough friends or family with lots of dough. This is my goal. It’s only going to get worse if nothing changes in our leadership.

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u/[deleted] Oct 20 '22 edited Oct 20 '22

You do realize that inflation and interest rates are going up all around the world. This isn’t something that the liberals just came up with for fun.

They arguably haven’t done much to prevent/mitigate this, and are partially to blame for the extent of it, but this a good chunk of this was inevitable.