[james4beach]

Question for everyone: do you think these 4% ish GIC rates will stick around?

Is there an urgency to lock in these 5 year rates, before they plummet again?

 

[Gator13]

Very good question. I would hope this becomes the new norm. I think a reasonable interest rate would be healthy for the economy moving forward.

 

[gardner]

do you think these 4% ish GIC rates will stick around?

The central banks are telegraphing a strategy of increasing rates over at least several quarters. I think bonds and therefore GICs will follow suit at least for a few quarters too. My gut feel is that it will be at least this time next year before rates start falling.

I've got a GIC coming up in a few weeks and expect to get 4.15% for its replacement.

 

[londoncalling]

It is hard to tell if GIC rates have already gone up in anticipation of the next couple hikes or will we see GIC rates follow B of C. I have no point of reference but I do know morrgage rates will go up faster than GIC rates. I have most of my fixed income sitting in cash at the moment waiting to lock in in July after the June B of C meeting. I will either lock into a 3 or 5 year ladder at that point. Only caveat being that I may end up putting that money into blue chip dividend payers should we see a drop in equities like we did in 2020 or 2008.

 

[MrBlackhill]

Looking at EQBank's GIC, the rates are basically the same from 2-year GIC to 10-year GIC. The yield curve is pretty flat. While I'm definitely not expert, I guess there's not much room left for increases. I believe there will still be rate hikes this year as planned, but then we're pretty much done.

 

[Flugzeug]

My guess is a few more rate hikes and then the BoC will pause and assess. GIC rates will be higher in the coming months, who knows by how much. My crystal ball is a bit opaque these days though.

 

[sags]

For people who believe central banks will continue to hike rates......any concerns it may trigger a recession ?

Are recessions good or bad for GICs ? I am thinking in a recession, assets tend to fall and sometimes sharply.

Perhaps using GIC money to scoop up cheap assets would be a valid plan ?

 

[Beaver101]

^ Good possibility a recession will be triggered and by the time it's officially "declared", we're already in one.

Are recessions good or bad for GICs? If rates go up (and I think it will given the climbing inflation) and then of course it's good for GICs, recession or not. A recession would be bad for job seekers/workers and small businesses in particular. It's not like people on this forum (except millennials, make that GEN Zero, of course) hasn't seen a recession or 2. It's all part of the business cycle. Déja vu I say.

As for scooping up "cheap" assets with GIC monies, my first question(s) would be what kind of "assets" and what're you planning to do with those assets? My second question is - how "cheap"? Half price sale? And third, it would be dependent on what financial stage one is in - accumulation or decumulation (sic).

 

[sags]

I remember in the last recession, people with cash were scooping up bargains on things like boats, motorcycles, vintage cars, collectibles.

That was average folks with money. The folks with lots of money were scooping up homes and cottages.

 

[londoncalling]

Recessions tend to impact savers less than spenders. They have money to buy depressed assets when the recession comes. Depending on how inflated the assets became and how far the decline during the recession determines who makes out best. After over a decade of punishment savers are seeing a shift. I am not be celebrating the shift in the economy but I will definitely try to benefit from it if I can.

edit: correct typos