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Here's a man who knows inflation and interest rates, like no one else.

If you want to understand when the Bank of Canada might ease monetary policy, former BoC Governor Stephen Poloz is one of only a handful of people who's truly in a position of authority on the topic. He's a student of behavioural psychology and he uses that understanding to anticipate Canada's economic path.

We were lucky enough to spend an hour with him last week (but could've listened to him for 8 hours). What follows is part I of our chat, which covers:

• Whether mortgagors should form an opinion on BoC policy
• Why real interest rates matter
• The BoC's information advantage
• Which forecasters are most inaccurate
• How much weight he puts on bond market indicators
• What would take inflation to new highs
• Why borrowers need rate "insurance"
• When inflation expectations might come down
• How long it could take for inflation and rates to drop materially
• How much faith we should put in the BoC's forward guidance.

Below is that interview and the transcript:

Fixed-mortgage funding costs eased this week—ever so slightly.

The impetus was two-fold:

1. continued blow-over of U.S. banking worries, and
2. more signs of disinflation (among other things, average core inflation slid from 4.8% to 4.5%, and preliminary March retail sales estimates looked grim).

Rental investors take note. The nation's sole default insurer for 5+ unit rental properties plans to make insured borrowing more expensive.

Check out these fat premium hikes below. They take effect June 19, 2023 and apply to CMHC's Standard Rental and MLI Select products.

Further to yesterday's speculation about Scotia's loan-to-value policy changes, it turns out that rumour became fact quicker than expected. In a memo the bank sent out a few days ago—which we received Thursday—it announced that it was implementing the changes this week.

(Banks don't typically notify MLN of policy changes like this, but we invariably find out before long.)

Here is what we now know...

What Scotia changed