REAL 10 YEAR INTEREST RATE Bank of Canada 10 year Bond less CPI; also the TSX Real Estate, Energy and Gold Indexes. See also the Real Long Rate and the Interest Rate Spread and the Canadian Yield Curve
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The chart above shows that in June 2021, the "Real" Bank of Canada 10 Year Treasury Yield (the dotted blue plot, ie: the rate less CPI) carved out a new negative low Nirp-O-Nomic rate with CPI rising to 3.6% (1 month reporting lag).
Recall that CPI registered two negative prints during the April-May 2020 lock down at -0.2% and -0.4% respectively.
The cash real estate sector ie: the TSX Real Estate Index (solid green plot) caught bids as did the TSX Gold Index (solid gold plot) which remained well below the 2020 and 2011 highs. The TSX Energy Index (solid black plot) ticked higher with the summer "driving season" but remained in its long term downtrend from the July 2008 spike high.
The novel corona virus pandemic and global currency turmoil as well as trade and war unknowns are coloring both sides of the debate on the ultimate direction of gold, interest rates and the USD.
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The 10 year bond yield is a bench mark for real estate mortgage rates. I have used it in my Vancouver Condo Case Study to measure risk against the buy and hold argument. |
Compare 2006-2008 to 2015-2017
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