“60 percent of the time, it works every time.” Brian Fantana in Anchorman Of the many cognitive biases, the ‘anchoring effect’ is often cited as one of the most important and common.  It is our tendency to overemphasize a reference point or initial piece of information we receive, even if they are otherwise irrelevant.   There […]

“Let’s enjoy the moment.” Tiff Macklem Last week, the Bank of Canada (BoC) became the first of the G7 central banks to cut rates, lowering the overnight level from 5% to 4.75%.  The decision was widely anticipated (i.e., 80%) and one we think was relatively easy for them to make. The 5% level was proving […]

The archer who misses his mark does not blame the target. He stops, corrects himself, and shoots again.’ Confucius This time last year, we expressed our view that the neutral rate of interest (i.e., the level that is neither restrictive nor accommodating) was higher post-pandemic than in the ‘new normal’ era of 2008 – 2020. […]

‘I haven’t been everywhere, but it’s on my list.’ Susan Sontag As bond nerds, we are constantly engaged in discussions with allocators and investors about their fixed-income portfolios.  Three years ago, when interest rates were close to zero, these conversations were filled with a sense of frustration (and in some cases, another f-word). In an […]

Shemika Campbell holds the word limbo record at an astonishing 21.59 cm (8.5 inches). The Guinness Book Barring a reacceleration of inflation, it seems safe to assume that we have seen the last of the interest rate hikes in this cycle.  Both Governor Macklem and Chairman Powell have indicated that rates are sufficiently high, with […]