Posts from the ‘Monday Morning Mortgage Rate Updates’ Category

Fixed Versus Variable Rate Simulation: The Winner Is … Monday Morning Interest Rate Update (December 2, 2013)

Most of us understand intuitively that you can’t solve a debt crisis by creating more debt any more than you can cure alcoholism by drinking more alcohol. That’s why the U.S. Fed’s quantitative easing (QE) programs make so many of us nervous, even as QE continues to push stock prices higher and interest rates lower. The more I learn about this subject, the clearer it becomes that we are living on borrowed time (pun fully intended). That is the fundamental challenge that I now grapple with on a weekly basis when writing about the factors around the world that influence Canadian mortgage rates. Of all of these outside forces, there is no doubt that QE is the proverbial elephant in the room. On the one hand, QE (along […]

Why Quantitative Easing Should Make Canadian Mortgage Borrowers Nervous - Monday Morning Interest Rate Update (November 25, 2013)

Why October’s Strong Employment Data May Not Matter to the Fed - Monday Morning Interest Rate Update (November 11, 2013)

When the U.S. Federal Reserve met last week, it did as markets expected and decided to continue buying $85 billion of newly issued U.S. Treasury debt each month. To put that number in perspective, the Fed is now buying almost all of the new debt issued by the U.S. Treasury. This means that the U.S. federal government is financing its massive deficits in a closed system that is not subject to market forces. In simple terms, today, when the U.S. government needs more money, it simply sends the bill to the U.S. Treasury department, which then calls the Fed and asks it to fire up the printing presses for the required amount. (Preliminary calls like this are a good idea because it’s hard to keep enough ink on […]

The Bank of Canada Finally Drops Its Rate-Tightening Bias - Monday Morning Interest Rate Update (October 28, 2013)

Last week the U.S. government ended its budget crisis and avoided defaulting on its debt, but this much needed reprieve will be short lived. While the U.S. Congress finally passed a bill to reopen the government and raise the U.S Treasury’s debt ceiling, it only gave the U.S. government enough money to stay open until January 15, 2014, and only gave the Treasury enough breathing room to keep borrowing until February 7, 2014. Instead of being a lasting resolution, this latest development was just a pause in the action, like the time keeper’s bell going off in the middle round of an eighteen-round fight. Republicans and Democrats merely returned to their corners, where they now wait to be called out for their next round of budgetary brinkmanship. I […]

What Permanent QE Would Mean for Canadian Mortgage Rates - Monday Morning Interest Rate Update (October 7, 2013)