“Balance sheet normalization” will continue even if the BoC cuts its rates. It’s all about “settlement balances.”
Fed and ECB combined removed $4 trillion in liquidity. Inflation, after decades of calm, is hammering some sense into these central banks.
Over the three months through February, services inflation has been running at roughly the same hot rate as during the peak a year ago.
A big milestone for Quantitative Tightening in the euro area.
But if you invested USD three years ago following Buffett’s hype, you lost 5% because the yen crashed, thank you hallelujah BOJ.
Toronto houses -20% from peak, condos drop to 2-year low. Vancouver -8% from peak, Hamilton -25%, Victoria -14%. Calgary set new high.
Quantitative tightening powers along in the euro area.
Biggest home-price drops in the data going back to 2000 triggered by the biggest QT and highest rates in ECB history.
“If the markets don’t infer from this that it’ll be high for longer, we’ll have to use our rate instruments and hike to get where we want to go.”