Today’s FOMC was a relatively straightforward, as-expected affair. · The tapering of QE begins this month with a reduction of $15 bn per month ($10 bn in treasuries, $5 bn in mortgages) · At this pace, QE will be done in mid-June, which sets the stage for rate hikes in the second half of 2022. […]

A quick note from our trading desk on today’s Bank of Canada meeting and press conference. · The BoC has officially ended QE and moved into the reinvestment phase, where they will simply reinvest maturing bonds. They expect to be in this reinvestment phase until at least the first rate hike. · Forecast for the […]

Federal Reserve Chairman Jay Powell has achieved an amazing outcome. His highly anticipated speech this morning was a masterpiece of optimism and calmness. · Tapering is expected later this year, with the exact timing dependent on the impact of delta. No panic in bonds and equities make new highs. · Hiking is not on the […]

The Federal Reserve really knows how to thread the needle, having dropped hints about tapering without freaking-out the markets. The As Expecteds. · No change to the overnight rate · Still hold that the recent bout of high inflation is transitory · Quantitative easing continues as is The Surprises. · Not seriously concerned that the […]

Despite well telegraphed signals, the Bank of Canada (BoC) managed to surprise markets with their announcement today. The As Expecteds. No change to the overnight rate The BoC announced a taper in their bond buying from $4bn to $3bn a week. No specific details on how this will be done, but we expect the bulk […]