Ozzie Jurock is a friend of WREN and has had a long and very successful career in real estate investing. He’s also an award-winning author and speaker who keeps his finger on the pulse of local, national and global economic trends and indicators. In Ozzie’s latest Ozz Buzz newsletter, he makes some fascinating predictions regarding interest rates and the value of the Canadian dollar.
“The goal was and is: All banks increase rates fast to a new high, then start the slowdown of the increase, and then stay at a new high for 12-24 months. They are getting closer to achieving this goal.
As we said in our last video: The BOC flinched and we thought it would likely only go up another .5% in December. It did that last week. Inflation higher still than expected. Remember pivot does not mean, rates come down. The new prime rate of 6.45% means stress test at 7%. We expect rates to stay at least at this level for 2023.
Canada and the USA rate increases are peaking and then will stay likely at the new level for the entire year of 2023. It’s not a pivot. They will not go down but likely in Canada stop increases now (or only .25% early in the year). In the US, the final target seems to be 5% or 5.25 %. And then staying there! That would mean it has to see several smaller increases (.25%)
Mortgage rates are coming down temporarily! Remember long term bonds determine long term mortgage rates. Phoenix down to 6% rom 7% last week.”
“Still travels up and down with its commodity sector and in particular oil. It is possible that we see a further decline. David Rosenberg predicted a 71-cent dollar 2 years ago.
Both currencies: Canada is lucky that its largest trading partner is the US. Our Canada dollar has dropped from 84 cents to now just over 73 cents. It has bounced off this level a few times. The future? It depends (You knew it!) Canada benefits. In the eyes of foreigners, we have safe banks, a safe legal system. That is what matters. They wish to park their money. The loonie travels with oil, but if you are needing and waiting for new lows – we may be close to one. Bringing back some of your US dollar holdings to Canadian – the 71-73 cent level may be a good bet. A safe idea. No one knows for sure … a bottom for the Canada loonie. It remains your call.”