Ask and you shall receive
The team at Btchcoin News has been horrified and saddened by the racially motivated shootings that took place last week in Atlanta.
While we normally dedicate this space to our Buy Me a Coffee page, we would like to redirect your generous support this week to the Butterfly Asian and Migrant Sex Workers Network, a Canadian organization that has been doing incredible work promoting the rights and safety of those vulnerable to violence in our communities.
For those wishing to donate specifically to BC, SWAN Vancouver provides culturally-specialized supports & advocacy for Im/Migrant women engaged in indoor sex work.
People are freaking out about bond yields…
We explain why (in terms that actually make sense)
OK, so what’s happening…?
The Federal Open Market committee, the group within the U.S. central bank that sets monetary policy, met last week to discuss economic projections and the federal funds rate (the interest rate banks use to lend one another money). The big news? The Fed’s played it cool. The federal funds rate is set to stay at the ultralow level of 0.25% it’s been at for the last year, until at least 2023. Also, new GDP and unemployment projections indicate an upgrade in the Fed’s assessment of U.S. economic health.
So what’s the big deal then?
Something happened on Thursday: the yield on the U.S. 10-year treasury bond spiked to its highest level since January of last year following a sell-off in government bonds (bond yields and prices have an inverse relationship). Treasuries are government debt obligations that can be traded as “risk free” securities. Now if you’ve ever seen a ~yield curve~ you’ll know these bonds vary in the length of time that the government will pay them back (mature). Investors like to track the 10-year bond to benchmark risk and return across financial markets.
But is this good or is this bad?
Not to make this more confusing than it already is but… it can mean both!
Rising bond yields usually indicate hope for economic growth but can also indicate an upcoming spike in inflation. Investors have been getting spooked about increasing inflation tied to the roaring economic recovery happening in the states (soaring tech stocks, millions of daily vaccinations, $1.9 trillion in stimulus spending coming in hot). Last week we saw stock market indexes fall at news of rising bond yields, driven by a pivot away from tech or stay-at-home companies and toward “reopening” trades.
Cool, what about here in Canada?
Well, we saw pretty much the exact same thing from the Bank of Canada on March 10th – the overnight rate to be held flat at 0.25% and an optimistic update on the economy. The BoC reported that “despite the stronger near-term outlook, there is still considerable economic slack and a great deal of uncertainty about the evolution of the virus and the path of economic growth.”
We’re certainly in for another interesting year in the capital markets. Btchcoin is here to keep you up to speed along the way!
Canada’s Population Growth is (Almost) at an All-Time Low…
And no, it doesn’t have anything to do with the fact that all your friends are getting IUDs.
The figures are in, and they’re pretty bleak.
On Thursday, Stats Canada reported that our country’s population grew by an abysmal 0.4% in 2020 to 38,048,738. For reference, that is the lowest rate we have seen since World War I.
This statistic has little to do with birth rates, and a lot to do with COVID-19. The global pandemic meant that immigration was significantly scaled back from previous years. Just 184,624 people immigrated to Canada last year – that is roughly half of what we saw in 2019.
But what does this have to do with Canada’s economy?
Immigration and population growth are a major factor in Canada’s fiscal health. It has a significant impact on all facets of the economy, including the housing market and banking. Therefore, slow population growth also means a sluggish economy.
There are very early indications that population growth could pick up in 2021, with a slight up-tick in numbers seen at the start of the year.
Marc Desormeaux, an economist at Bank of Nova Scotia in Toronto, commented: “Safely resuming population flows is critical to Canada’s recovery from Covid-19.
“It’s just one month of data, and not every province has seen as much of an improvement, but it’s still encouraging.
We will accept that shred of hope to hold on to as we approach the end of this COVID-19 hellscape reality we’ve been living in.
It’s been a hot minute since our last 101 — but we heard your requests for more personal finance content and listened.
Read Part 1 of our budgeting guide and let us know what budgeting hacks you love – we’ll share them in Part 2!
If you read one thing this week:
Claire recommends this piece by Alex Nguyen of The Supplement, eloquently breaking down how the forces of misogyny, classism, and racism combined in the Atlanta mass killings — and how anti-Asian violence in Canada needs to acknowledged.