Is the sky really falling?5 year fixed mortgages at TD are currently 2.85%
5 year variable closed mortgages are currently at 1.55%. With a variable closed mortgage, the payments get fixed at a dollar value based upon prevailing rates, but if rates go up, higher interest costs accumulated over the life of the loan get added to the principle. Sorry if I'm wasting your time with this paragraph.
Currently, the Fed rate is 0.25%. Ten year US treasuries currently yield 1.77%
Let's assume rates go up 1% in 2022 as Powell "clamps down on inflation".
How woud a Fed rate of 1.25% stack up against history? The Fed rate has averaged 5.47% over the last 50 years (1971 to 2021) and yet somehow, we managed to survive.
I know, the rules are different now as the world has plunged into a black hole of debt.
But, would you stop investing in Suncor or Enbridge or the banks to put your money into 10 years treasuries, even if the yield increased up to 3%? Perhaps, but only if you thought the market was going to crash.
So the real question, is do the politicos want the stock markets to crash and stay down through a prolonged depression? If that happens, "all new politicos".
I don't need SU (or ENB, TD, BCE etc) to grow like TSLA or SHOP. I just need the world to survive and keep on keeping on. Sure, there are going to be trying days in the markets just like there are in any household or relationship, but I don't think the sky is falling....yet :)