“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 […]

“It’s a riddle wrapped in a mystery inside an enigma.” Winston Churchill We have long maintained that inflation is a complex and mysterious beast.  With so many moving parts, it is nearly impossible to model and predict. A task made even more difficult these past few years, with new dynamics emerging from the pandemic, extreme […]