Curve Your Enthusiasm
Is the BoC mispriced enough?
Feb 6, 2024
The podcast discusses recent central bank decisions and the problem with short-end pricing in Canada. They also analyze the implications of the latest Treasury refunding announcement and the path of swap spreads. The hosts have a friendly disagreement on whether the belly is cheap or rich in Canada.
26:41
AI Summary
AI Chapters
Episode notes
Podcast summary created with Snipd AI
Quick takeaways
- The accuracy of inflation measurements by the Bank of Canada is questioned, suggesting a need for a change in focus and communication strategies.
- The surplus in tax receipts has led to negative bill supply, delaying the urgency of quantitative tightening (QT) and potentially allowing for reinvestment back into repo.
Deep dives
Central Bank Confidence and Policy
The podcast episode begins by discussing the confidence of central banks, particularly the Federal Reserve (Fed) and the Bank of Canada, in reaching their inflation targets. Despite measured inflation coming down, the surrounding macro data does not confirm the inflation measurements. The podcast suggests that the Fed may cut interest rates in the future if inflation reaches its target and strong growth persists. In Canada, the inflation measures have not decreased as much as expected, leading to questions about the accuracy of the measurements. The Bank of Canada may have to change its focus and communication strategies to address this issue.
Remember Everything You Learn from Podcasts
Save insights instantly, chat with episodes, and build lasting knowledge - all powered by AI.
