CMB
CMC METALS LTD.
stock CVE

https://www.bnnbloomberg.ca/canada-shelves-proposal-to-eliminate-mortgage-bond-program-1.2001819
Quote:
>It has recently allowed larger CMB issuance as part of a package of measures intended to try to stimulate the construction of more homes.
So this is old news that was known since Nov 2023. CMB participants actually lobbied for CDN government to continue the CMB purchase program.
The intention is to give condo developers incentive to increase the supply of housing.
It's not the job of Bank of Canada to increase housing supply, that falls on the CDN government. There is no shocked Pikachu here, CDN government is simply exercising a policy tool at their disposal.
This is not the quantitative easing that you think. Mortgage rates might not go down by much, if at all by this purchase, because there are many other market participants and market forces at play. Also this is restricted to CMB's and not others types of MBS's

cash injection is cash injection. CMB means more housing at the cost of everything else going up

Fair enough, but that can change pretty quickly.
Regardless, when the government sells the bonds then buy's the CMB's it's still putting that money into specific areas of the financial system which is likely inflationary and will also affect yields (same as QE), inflationary again.
Since they're now going to have CMB's as an asset they can borrow against, from anyone, including the central bank, that is a new source of money.
*If* the BoC lends to them on their secured lending program they can still say they're doing QT yet still be increasing available government money. ..Through the loan instead of buying bonds.

https://www.bnnbloomberg.ca/canada-shelves-proposal-to-eliminate-mortgage-bond-program-1.2001819
Quote:
>It has recently allowed larger CMB issuance as part of a package of measures intended to try to stimulate the construction of more homes.
So this is old news that was known since Nov 2023. CMB participants actually lobbied for CDN government to continue the CMB purchase program.
The intention is to give condo developers incentive to increase the supply of housing.
It's not the job of Bank of Canada to increase housing supply, that falls on the CDN government. There is no shocked Pikachu here, CDN government is simply exercising a policy tool at their disposal.
This is not the quantitative easing that you think. Mortgage rates might not go down by much, if at all by this purchase, because there are many other market participants and market forces at play. Also this is restricted to CMB's and not others types of MBS's

cash injection is cash injection. CMB means more housing at the cost of everything else going up

Fair enough, but that can change pretty quickly.
Regardless, when the government sells the bonds then buy's the CMB's it's still putting that money into specific areas of the financial system which is likely inflationary and will also affect yields (same as QE), inflationary again.
Since they're now going to have CMB's as an asset they can borrow against, from anyone, including the central bank, that is a new source of money.
*If* the BoC lends to them on their secured lending program they can still say they're doing QT yet still be increasing available government money. ..Through the loan instead of buying bonds.