TSX:AX.PR.E - Post by User
Comment by
Torontojayon Mar 04, 2024 5:01am
45 Views
Post# 35912614
RE:Interest rates
RE:Interest rates Yes, that sounds about right.
An alternative and useful way to think about the 5 year bond yield is to ask yourself, what is the expected nominal gdp for Canada over the next 5 years? If the answer is 3.5%, then a 5 year bond yield should be priced no higher because it is considered a risk free rate. Whereas gdp is not a risk free outcome which consists of debt plus equity. The economy cannot grow sustainably if long term debt exceeds the growth rate of the economy. This is a very important concept that very few even know about.