{"id":57542,"date":"2021-04-25T06:25:07","date_gmt":"2021-04-25T11:25:07","guid":{"rendered":"https:\/\/olduvai.ca\/?p=57542"},"modified":"2021-04-25T06:25:07","modified_gmt":"2021-04-25T11:25:07","slug":"the-taper-next-door-bank-of-canada-cuts-bond-purchases-by-25-total-assets-drop-by-13-rate-hikes-moved-forward-possibly-july-2022","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=57542","title":{"rendered":"The Taper Next Door: Bank of Canada Cuts Bond Purchases by 25%. Total Assets Drop by 13%. Rate Hikes Moved Forward, Possibly July 2022"},"content":{"rendered":"
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The Taper Next Door: Bank of Canada Cuts Bond Purchases by 25%. Total Assets Drop by 13%. Rate Hikes Moved Forward, Possibly July 2022<\/a><\/h3>\n<\/header>\n
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Housing craziness is front and center.<\/strong><\/p>\n

The Bank of Canada, which already holds\u00a0over 40% of all outstanding Government of Canada (GoC) bonds<\/a>\u00a0\u2013 compared to the Fed, which holds less than 18% of all outstanding US Treasury securities \u2013 announced today that it would reduce by one-quarter the amount of GoC bonds it adds to its pile, from C$4 billion per week currently, to C$3 billion per week beginning April 26.<\/p>\n

In its statement, it pointed at the craziness in the Canadian housing market \u2013 \u201cwe are seeing some signs of extrapolative expectations and speculative behavior,\u201d it said.<\/p>\n

Back in October, the BoC made the first reduction, tapering purchases of GoC bonds from C$5 billion per week to C$4 billion, and it had stopped adding mortgage-backed securities, of which it had never bought many to begin with.<\/p>\n

In March, the BoC announced that it would unwind its liquidity facilities, thereby reducing its total assets by about 17%, from C$575 billion at the time, to C$475 billion by the end of April. And this has progressed as planned.<\/p>\n

The BoC cited\u00a0\u201cmoral hazard\u201d associated with this central bank craziness<\/a>\u00a0as one of the reasons for the unwinding of its liquidity facilities, what are now mostly repurchase agreements (repos) and short-term Government of Canada Treasury bills. Its total assets dropped by 13% over the past month, to C$501 billion on its most recent balance sheet through the week April 14:<\/p>\n

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The total amount of the assets has declined because the BoC is unwinding its liquidity facilities. The largest remaining categories are the term repos and the short-term Treasury bills. As they mature, the BoC gets its money back, but doesn\u2019t replace those securities, and the balance declines…<\/p>\n

\u2026click on the above link to read the rest of the article\u2026<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

The Taper Next Door: Bank of Canada Cuts Bond Purchases by 25%. Total Assets Drop by 13%. Rate Hikes Moved Forward, Possibly July 2022 Housing craziness is front and center. The Bank of Canada, which already holds\u00a0over 40% of all outstanding Government of Canada (GoC) bonds\u00a0\u2013 compared to the Fed, which holds less than 18% […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[942,88,122,2340,487,6768,4254,4255],"class_list":["post-57542","post","type-post","status-publish","format-standard","hentry","category-economics","tag-bank-of-canada","tag-bonds","tag-central-bank","tag-housing-market","tag-liquidity","tag-moral-hazard","tag-wolf-richter","tag-wolfstreet"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/57542","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=57542"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/57542\/revisions"}],"predecessor-version":[{"id":57543,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/57542\/revisions\/57543"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=57542"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=57542"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=57542"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}