Interest Rates and the Economy

Fed balance sheet normalization at last

The U.S. Federal Open Market Committee (the Fed) held interest rates steady at today’s meeting, with a target range of 1% – 1.25%. After preparing the markets over the last several meetings, the Fed finally announced they would begin their long-awaited balance sheet reduction plans in October 2 ...

Boeing's Huge Pension Gaffe?

Katherine Chiglinsky, Julie Johnsson, and Brandon Kochkodin of Bloomberg report, Down $20 Billion, Boeing Stuffs Pension Fund With Its Own Shares:Like so many companies in America, Boeing Co. has largely neglected the gaping deficit in its employee pension as it doled out lavish rewards to sharehol ...

Will the Fed start normalization this week?

The dials of geopolitical and monetary risk are spinning in different directions across the globe. Of note in the U.S., markets are wondering whether glimmers of political bipartisanship bode well for reform legislation, and the Federal Reserve (Fed) is gearing up for what may be one of its most im ...

Q: Hi, Pat. I have held Bank of America for a number of years and have a profit of over 50%. Do you see a further increase in value of this stock in the future? Also, I hear that Warren Buffett is buying more shares. Thanks.

A: Bank of America, $24.89, symbol BAC on New York (Shares outstanding: 10.6 billion; Market cap: $260.6 billion, www.bankofamerica.com), has moved up since November 2016, along with many other U.S. bank stocks. Those gains are partly because the Trump administration has pledged to reduce some of t ...

What is the “Best” Mortgage Rate?

Six in 10 mortgage consumers choose brokers, in large part because they think brokers will get them the best rate. All too many of those people associate the “best” rate with the “lowest” rate. Mortgage professionals know that’s not generally true, but convincing clients of this isn’t al ...

US Pension Storms From Nowhere?

Over the weekend, John Mauldin wrote a comment, Pension Storm Warning (added emphasis is mine):This time is different are the four most dangerous words any economist or money manager can utter. We learn new things and invent new technologies. Players come and go. But in the big picture, this time i ...

Paying taxes on an inheritance

Q: I have a son that is living in the U.S. (for the last 20 years) and married. Would he have to pay taxes in the U.S. when he inherits from his parents? How would the taxes work in this case? –Alain A: Alain, generally speaking no, your son will not have to pay any tax on inherited money or pr ...

DSGE Wars (Again)

There's been a small revival in the arguments around Dynamic Stochastic General Equilibrium (DSGE) models. My thinking on these models has evolved somewhat; I think they are not particularly interesting, but the arguments over there use are somewhat misplaced.(I am getting ready to head out to the ...

Opening a TFSA at your bank

M A K I N G   B A N K What would you rather do with your money? Put it away in a bank account and let it sit, or put it into a TFSA and watch it grow? OK, silly question. We all want to see our money make money (and there is no better way to do that than through a TFSA), but what’s the proce ...

The connection between economic news and the stock market

Maybe Jerry Lee Lewis was singing about the current investment landscape. Look around and you’ll see there is indeed a whole lotta shakin’ goin’ on. The global economy is on a roll Canada is booming Interest rates are rising, as are Canadian bond yields are rising The loonie is on the m ...