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@robfordlives The duration statistic I assume you are using (modified duration) takes yield to maturity as an input to estimate price loss/gain. As @Thal81 points out this is not the Bank of Canada rate or any particular bond rate you might see in the media. So it’s not observable.

To get an estimate of how your ETF might change in price with changes in rates you would look at the type and maturity (term) of the bonds it holds. Then focus on potential rate changes on those types of bonds.
 

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Interestingly enough ZAG is up 3.5% in the last month or so. I continue to scratch my head at the moves of the bond market....if anything both US and Canadian governments getting more aggressive regarding rate hike increases and frequency and inflation status are up. That should mean existing bonds lose value but they have done the opposite
 

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Interestingly enough ZAG is up 3.5% in the last month or so. I continue to scratch my head at the moves of the bond market....if anything both US and Canadian governments getting more aggressive regarding rate hike increases and frequency and inflation status are up. That should mean existing bonds lose value but they have done the opposite
My theory is that the more the central banks speak (both Federal Reserve and BoC) the more it looks like these guys are too scared to raise interest rates. I've been listening to Powell and I don't see any strong commitment to raise rates.

I think earlier this year, bonds fell sharply when everyone thought rates were going much higher. But now it seems increasingly doubtful that rates will ever go up by much. Analysts in the US are guessing that only two or maximum three rate hikes are coming. At a quarter or half point each, that's really not much.

By the way, this is why everyone needs to invest passively in bonds and NOT try timing the market. As I've been saying for years, we really have no idea if interest rates will go up or down, or by how much. The future is uncertain and nobody knows where interest rates will go.
 

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My theory is that the more the central banks speak (both Federal Reserve and BoC) the more it looks like these guys are too scared to raise interest rates. I've been listening to Powell and I don't see any strong commitment to raise rates.

I think earlier this year, bonds fell sharply when everyone thought rates were going much higher. But now it seems increasingly doubtful that rates will ever go up by much. Analysts in the US are guessing that only two or maximum three rate hikes are coming. At a quarter or half point each, that's really not much.

By the way, this is why everyone needs to invest passively in bonds and NOT try timing the market. As I've been saying for years, we really have no idea if interest rates will go up or down, or by how much. The future is uncertain and nobody knows where interest rates will go.
BOE raised rates last week. BoC and Fed have both said they will start to hike next year after they stop buying bonds. Last week Waller (Fed Board Member) said it's a given that the Fed will increase in March. Long bonds are down because of this tone - market participants expect these Bank officials to hike short term rates and this will bring inflation under control and preserve their value.

Internal consistency implies that if you think they are not going to raise rates then you are counting on inflation dissappearing by itself or COVID puts the economy back into recession again.
 

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Internal consistency implies that if you think they are not going to raise rates then you are counting on inflation dissappearing by itself or COVID puts the economy back into recession again.
I think IF COVID tries to put the economy back into recession, there will be another round of handouts and debt building that will only increase inflation.

Money supply is a proxy for economic value.
You can't continuously increase the money supply faster than you create economic value, without getting inflation.
 

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BOE raised rates last week. BoC and Fed have both said they will start to hike next year after they stop buying bonds. Last week Waller (Fed Board Member) said it's a given that the Fed will increase in March. Long bonds are down because of this tone - market participants expect these Bank officials to hike short term rates and this will bring inflation under control and preserve their value.

Internal consistency implies that if you think they are not going to raise rates then you are counting on inflation dissappearing by itself or COVID puts the economy back into recession again.
But long bonds are not down, TLT the etf that tracks 20 year treasuries is up 12% from it's 52week low registered in March
 
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