Rates
This is a boring post.
Not about AI. Not about space stocks (which I also own because they’re fascinating). Not about whatever headline is moving markets today.
Just bonds.
Canada’s long-term bond yields are sitting near multi-decade highs, and it’s mostly being ignored. But I think this is part of the market that quietly drives everything else.
Especially mortgages.
In Canada, fixed mortgage rates don’t really follow the overnight rate from the Bank of Canada, they follow bond yields. So even if people are expecting rate cuts, it doesn’t mean fixed rates are coming down in a meaningful way.
We’ve seen this before. The central bank can start easing, but if the bond market isn’t convinced, fixed mortgage rates stay higher than people expect.
That’s where things get real for us regular folk.
People renewing over the next couple years are still facing much higher costs. Affordability doesn’t magically improve. Housing doesn’t just bounce because of a few rate cuts.
And then there’s the bigger signal underneath all of it…
Yields being this high are doing two things at once:
• slowing the economy (which helps bring inflation down)
• signaling that inflation might not be fully gone
That tension matters more than any headline.
If you look at history, environments like this tend to shift what works in markets. It’s less about chasing big narratives, more about:
• cash flow
• durability
• not overpaying for long-term expectations
Markets can jump around on news or politics, but this is the anchor.
And right now, the anchor is saying: things might stay tighter for longer than people expect.
