BoC Governor Macklem Discusses Neutral Rate and US Deficit as Fed Holds Rates
Newsquawk ·
Bank of Canada Governor Tiff Macklem stated that US deficit spending reflects political will, noting that inflation projections rely on fuel cost pass-throughs and the estimated neutral interest rate could increase. On October 28, the BoC kept its benchmark interest rate steady at 2.5%, matching market forecasts. The central bank upgraded its 2026 GDP growth projection to 1.0% from 0.7%, while revising 2027 and 2028 growth forecasts to 2.0% from 1.8%. Meanwhile, the US Federal Reserve maintained its fed funds rate at 3.75% to 4.00% with two dissenting votes, as expected. Fed Chair Warsh emphasized that monetary policy measures are beginning to take effect and reiterated the commitment to achieving the 2% PCE inflation target. Additionally, the UK DMO announced a planned gross gilt issuance of GBP 250.6 billion for the 2026 to 2027 fiscal period, surpassing the prior program.
AI 시장 분석
While the Bank of Canada (BoC) left its benchmark interest rate unchanged at 2.5% and hinted at a potential rise in the neutral rate, the U.S. Federal Reserve held rates steady at 3.75-4.00% while assessing its monetary policy path. Governor Macklem highlighted inflation forecasts driven by energy cost pass-throughs and expanding U.S. fiscal deficits, signaling upward pressure on long-term interest rates. Market participants should monitor the potential upward revision of neutral rates by central banks and the reaction of the bond market.
상승 영향
- Banks — Expectations of rising neutral rates and upward pressure on long-term yields positively impact banks' net interest margins (NIM), boosting profitability prospects.
하락 영향
- Real Estate — Rising neutral rates and upward pressure on long-term interest rates lead to higher mortgage rates, dampening investment sentiment and demand in the Canadian and North American housing markets.
- Growth Stocks — If rate cut expectations weaken and long-term rates remain high, the discount rate for future cash flows increases, exacerbating valuation burdens.
- Bonds — The possibility of upwardly revising neutral rates and the pricing of higher long-term yields directly cause bond prices to fall (yields to rise), acting as a negative factor for bond investments.
DYAX 전담 분석
The BoC's hint at a higher neutral rate and the Fed's rate freeze at 3.75-4.00% act as factors increasing upward pressure on long-term yields in global bond markets. In particular, growing concerns over inflation pass-through driven by rising energy prices are heightening volatility in bond yields.
If the upward trend in long-term rates driven by future neutral rate reassessments persists, it could exert downward pressure on growth stocks and the real estate market. On the other hand, bank stocks could benefit from expectations of improved net interest margins (NIM). As key indicators, the yield curves and inflation expectations of Canadian and U.S. government bonds should be closely monitored.
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