The BOS is Not the Boss

The Week Ahead

July 16, 2018

The ink was barely dry on the Bank of Canada’s July hike when markets turned their focus to when the next tightening would come. There was a sense that in his strong press conference defense of an upbeat view of the economy, Governor Poloz was trying to send a message that he’s itching to go again sooner rather than later.

That was despite the fact that Poloz’s recent speech was about why he does not want to provide that sort of precise forward guidance. So translating his words into a well de ned hint of a September or October rate hike is simply a mistranslation. At most, he is just leaving the window open for October if we get very good news ahead.

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What Not to Read in the Week Ahead

The Week Ahead

July 9, 2018

Canadian investors will be tempted to read the latest missives from the Bank of Canada in the coming week, looking for clues on interest rate policy ahead. Go get a good novel instead.

In all likelihood, Governor Poloz will opt to nudge interest rates a quarter point higher, given that the second quarter looks to see a rebound in growth to over 2% after three successive disappointments. While markets are already well braced for that, there’s a lot of uncertainty on the policy path thereafter. Could the text of the rate announcement, the new Monetary Policy Report, or the Governor’s press conference, help you in that regard?

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Health Care Costs Up, Retirement Expectations Down

An increasing amount of Canadians contemplate retirement

July 5, 2018

It doesn’t matter what region of Canada you live in, the idea that we all have access to ‘free’ medical care has – historically – assumed mythic proportions. Trouble is, there is a growing disconnect between the outsized health care dream we grew up with and the painful reality supporting it now – as an increasing amount of Canadians contemplate retirement.

This was the dispiriting conclusion of Gail Johnson, writing in The Globe and Mail (May 16, 2018) – Health-care costs threaten even the most robust retirement portfolios1 – and it makes for a somber reading.

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