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- THE BOC JUMBO CUT ?!
Welcome to the October edition of the Wealth Awesome newsletter. Thank you to the 15,000+ 🇨🇦 subscribers who join us today!
Market Update
Summary
"BoC Drops the Hammer: A Jumbo Rate Cut to Tackle Economic Weakness"
The Bank of Canada (BoC) is set to make an aggressive 50-basis point cut to its overnight interest rate on Wednesday (today by the time you open this), reducing it to 3.75% from 4.25% to address a weakening economy.
Despite three prior 25-basis point cuts since June, economic indicators remain sluggish, with inflation dipping below 2% in September, sluggish GDP growth, rising unemployment, and declining job openings.
BoC policymakers aim to stabilize inflation and revive economic momentum, with Governor Tiff Macklem emphasizing the need to act swiftly due to the delayed effects of rate adjustments.
Analysts expect another 50-basis point cut in December, with rates potentially dropping to 2% by mid-2025.
⏱️ TLDR: Our mortgage payments are going down, soon.
Key Takeaways 💡
1. Economic Weakness Persists: Inflation is now below target, GDP growth is sluggish, and unemployment is rising, pressuring the BoC to act decisively.
2. Further Rate Cuts Likely: The BoC may reduce rates to 2% by mid-2025 to counter economic stagnation and prevent prolonged underperformance.
TD had a wicked as they pled guilty to conspiracy to commit money laundering, and has been hit with a historic fine — more than US$3-billion — as well as penalties such as an asset cap and restrictions on opening new branches in the U.S.
Yikes, terrible for all honestly. Core holding for most portfolios directly and indirectly, no matter what we think of the situation.
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See you next month!
The Wealth Awesome Team
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