The Canadian Investor - New Fed Chair, Loonie Slides & Canada’s Population Keeps Falling

Episode Date: June 20, 2026

This week on Canadian Macro Investor, Simon and Dan break down a packed macro backdrop: global central banks turning more hawkish, Kevin Warsh’s push to rethink how the Fed communicates and uses data, and why markets may be too relaxed about inflation risks. They also discuss the Canadian dollar, oil prices, the fragile Iran memorandum of understanding, and whether geopolitical risk is being ignored because investors are so focused on the AI trade. From there, they dig into OSFI lowering the Domestic Stability Buffer for Canadian banks, what it could mean for credit creation, and whether Ottawa is quietly trying to stimulate the economy through the banking system. The episode wraps with Canada’s population decline, falling rents, purpose-built rental supply, and why the housing market could remain under pressure even if construction slows. Topics discussed: central banks, Fed policy, Bank of Canada, Canadian dollar, oil prices, Iran, AI stocks, OSFI, Canadian banks, housing, rents, population growth.   Watch the full video on Our New Youtube Channel! Check out our portfolio by going to Jointci.com Our Website Canadian Investor Podcast Network Twitter: @cdn_investing Simon’s twitter: @Fiat_Iceberg Braden’s twitter: @BradoCapital Dan’s Twitter: @stocktrades_ca Want to learn more about Real Estate Investing? Check out the Canadian Real Estate Investor Podcast! Apple Podcast - The Canadian Real Estate Investor  Spotify - The Canadian Real Estate Investor  Web player - The Canadian Real Estate Investor Asset Allocation ETFs | BMO Global Asset Management Sign up for Fiscal.ai for free to get easy access to global stock coverage and powerful AI investing tools. Register for EQ Bank, the seamless digital banking experience with better rates and no nonsense.See omnystudio.com/listener for privacy information.

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Don't be surprised when there's a cycle. If there's uncertainty in the markets, there's going to be some great opportunities for investors. This has to be one of the biggest quarters I've seen from this company in quite some time. Let's do this. Welcome back to weekly. We missed a week, but weekly Canadian macro investor. Yeah, yeah. Yeah, I think there's, it was nice though.

I mean, I guess I mean people are listening to this show because a couple of people reached out to me and they're like, what do you guys still doing this? And I was like, no, sorry, we just took a week off. But anyway, we on a weekly basis, we talk about macro and the way that it interacts with, I think Simone's world, which is more on the equity side and my world, which is more on the real estate side and real estate being particularly exposed to interest rates. So that's kind of what I pay a lot of attention to. A lot, I mean, even last week we had a lot to talk about, but then this week, I think there's even more, right? So you saw ECB hike last week. We saw

who else, Bank of Japan. Yeah. Bank of Japan. Yeah. And, you know, it's funny. I mean, Warsh basically, like, yeah, warsh basically signaled that they probably will end up hiking, which the market has sort of been pricing in. It's just funny, right? Like, I don't know. Like, I think they'll do it. I don't and then I think you have the in Canada you have the Canadian dollar I mean the US dollar is obviously strong ahead of the market trying to price in that they'll hike and Canadian dollar probably signaling that the Bank of Canada won't be able to follow in that. I don't know was your assessment the same as mine like is that seem to be kind of what's going on? Yeah I think well for the Canadian dollar I think that would be it and then you factor that in with the Iran memorandum

of agreement with the US lower oil prices. So yeah. have that kind of double whammy in the Canadian dollar. And then I'll just share here, obviously, we've shown this quite a bit, but the CME Fed Funds rate, now they're really pricing. The rate guy really soon, essentially almost guaranteed now in the September meeting. Yeah. So that's a bit of a change. I was, I was a bit surprised, but did you listen to the press conference from Warsh? It was pretty as much as I could. Yeah. Yeah, no, it was good. It's just funny, right? because like everybody was sort of talking about how like Trump would install him to get like to get cuts. And now we're like, now we're talking immediately about hikes, right?

Yeah, I mean, he had some good lines. I mean, my biggest takeaway is that he's not afraid of changes. So he said they'd be doing like five task force, one, to look at communications. So people might think, oh, why would they look at that? But the way the Fed talks, those press conference, Jerome Powell and even before him, like they would put a lot of emphasis. on communicating with the markets. For sure. Just lead the markets to be confused, to be honest.

I think for the most part, they were confused too. Like not that were any better than them, but it's just they, yeah, the guidance is not necessarily a good thing. And he actually decided not to provide any guidance. So the dot plot that usually are given by FOMC members, he decided to actually not do it. So it kind of shows in terms of what he thinks for communication standpoint. And he said, they'll be press conference, but they'll only be some if there's something useful to communicate.

So they will just won't talk to talk. They'll be reexamining the balance sheet. So just examine how the Fed's balance sheet and how large it is and should be overtime. So they want to be examining that too. The data part, and I know, I don't know if you saw that. So really, you talked about a lot of the data and whether that the data that the Fed has been looking at to make its decisions, the FOMC, if it's the right data or not. And he took like a pretty good swipe at it too. So he had a line and I'm not probably misquoting him a little bit, but he's not

interested in echoes of history. And to illustrate that point, he referenced non-farm payroll surveys that sure they can be useful after the third revision. But that third revision happens what, like a year after the numbers actually come out. So he's essentially like they need to look at better data. They want actual data that's happening in the moment. You reference getting more data information from CEOs because they know what's happening with their business right now. And they're really looking at new techniques, also getting data from the public sector, but just kind of revamping that. And that's the third thing they want to look at. They want to look at in terms of again, a tax for productivity employment and then the inflation framework, even looking as whether that 2%

an inflation target is still appropriate or not. Right. It's funny, eh, like, are we at a point where we're going to move the goalposts? Like, I think there was a period of time when we were at one to two, and now it's like two to three. Like, they, I think that the U.S., it seems like they want to continue to let the economy run reasonably hot, without, like, as long as the consumer can absorb it. And I think it's convenient that their consumer data, a lot of it is propped up by the disparity in the U.S., like wealth. What was the figure that we mentioned? Like 50% of consumption comes from the top 10%

of earners. Yeah, I think it could be something like that or even worse. Like it's really, it's really polarized the dispending. Yeah. So I think that is like how long can can they afford to run the economy hot? And consumers can withstand it inflation based on based on that, right, that you have so many rich people that are keeping the consumer spending propped up, maybe for a long time. And then they'll get away, they'll get, they'll get, they might get away with like, just sort of engineering this case shaped recovery. I don't, I don't know your thoughts, but like, it feels like they may delay sort of like

being concerned about the recession call or any major withdrawal in consumption until the figures get so bad that they're unignorable. And it seems like we're not even close to that given all the cap-ex that's being spent, like all the hyperscalers, that tells me there's going to be a lot of capital that's going to be needed to be pushed into the market. I think bond traders, you know, and bond investors can basically charge whatever they want, or they can pay whatever they want for bonds, I guess is the easier way of saying it. I don't know what you think there. Yeah, I mean, I think he also had something, he had an interesting question where someone, they were trying to ask him in terms, like,

in the questions, the reporters, like trying to get some sort of guidance from him, and he stayed pretty firm on it, but someone asked about, like, if he thought the current rate was restrictive or not for the economy, so kind of going to what you were talking about there. And he said, well, it's, it kind of, it depends on where you look at in the economy. And I thought that was interesting because specifically knowing housing how you do, he said, looking at it, it's pretty restrictive when you look at the housing market in the US. Yeah. So that is one thing actually pointed out. But then he also said when you start looking at the rest of the economy, it's harder to find areas where it's actually restrictive in the economy. So I think,

That's a good example there where it's not like one size fits all. And I thought it was a really interesting kind of point that he mentioned where, yeah, the housing market does look restrictive, but the rest alluding, I think, a little bit to the hyperscalers. It does not look that restrictive. Plus, you factor in all the demand that there is. And then it's really the supply side that's getting harder for them to measure right now. Now, what about on the other side of the trade? Like, yeah, there's a lot of, so, okay, so there's a couple of things that I want to unpack there. I'm going to list them first. So number one is there, like, how much of this is even within the scope of what a central bank can do, right? Like how much, you know, like oil price push their inflation. It's already too late for them to get, you know, like even with oil prices and the government flooding the market with strategic petroleum reserve to keep oil prices down, gas prices are still massively high. And so a year, you know,

fuel for diesel inputs for the food season. Like we're going to see high inflation probably until the end of the year. How much of that can actually be gamed by central bank activity, monetary policy, and then changing the rate. To me, it's kind of like the COVID thing, right? It's like those supply chain disruptions where it doesn't really matter how much they, you know, they hike rates. Like it's not going to fix the giant ship that's wedged in the canal or, you know, the war

Iran or whatever. So that's kind of one of the thoughts on my end. And then the other side, the other one that I kind of wanted to talk about is the other side of the trade, right? Like, you see a lot of companies coming into earnings, you know, U.S. businesses that are coming up high as a result of AI. But then, you know, you get the, we're getting this round of earnings, like Accenture down substantially cognizant, IBM, Cap Gemini, et cetera. They're all down like, what, five to eight, five to ten percent. Some like some even hitting 52 week load. So, you know, there's, there's, I think there's the bullish piece of the AI trade, which the market seems to be focused on. And then there's like the bearish piece that everybody seems to be ignoring too, right?

I don't know your thoughts. Those are the two things that I kind of want to, I'm curious to get your take on. Yeah, exactly. It really depends. Like, it's not even tech as a whole. Like you mentioned, it's just certain parts of tech that are really getting a big boost from AI. And also some other sectors, right? If you have, I think it's Quantas Services company I've talked a lot about.

but I don't own it. I would, I should I did, but that's a buildout of the power grid. So these obvious kind of AI buildout plays are doing pretty well, but then you have other companies. You mentioned essential, those not familiar.

It's a professional services company tied to IT. They're down. I think they reported, like they were down like 18% yesterday. I think the markets are closed today in the U.S., but that's a company that was struggling. Like, they're down after being down a whole lot.

Like this company is down just year to date. like down 50%. And that's what you're seeing, right? You're seeing an Adobe as well, despite reporting pretty good results. It's just that fear that AI will eat into their business. And there's a lot of people that think it's a big value play. Some people,

other side think there's threats to the business, but at the end of the day, you're probably looking at some of these businesses that had big modes that will slowly see them erode over time. And it's really what you're seeing in the stock market is like those big names just pushing that above and you were talking about what the Fed and just to kind of circle back to what you were saying about the Fed, what control does it have on inflation? And he like, he actually talked

about them. He said, he talked about that saying, well, if someone approaches me in the grocery store and says, look, why are the prices so high? Ask him about inflation. You just said, look, we can't impact the oil prices, the price of a dozen eggs, beef milk, etc. But our job is to make sure that the second order effects are not broadening on the economy. So that's essentially what he responded, which I thought was interesting. I'm not even sure how much they can control the second order effects. Yeah.

But I thought that was an interesting one. And to anyone listening who hasn't listened to the press conference, like 45 minutes, it's worth a listen because he's a much better communicator than Powell. Yeah. Yeah. I mean, it's not like,

I think it's funny, like Powell and Tiff too. It's like, you know, like they, I think they, you know, they kind of had the curse of being chairs during the pandemic. And so they maybe were not as careful with their language as they should have been. But yeah, Warsh is definitely, I mean, he, he's very skilled at communicating these things to the layperson, which I think is of value right now as we're heading into a weird, very, very weird time. What about like the likelihood of hikes? Like, it does feel like the, you know, like DeCentral

banks always get this wrong and like to like to end up hiking into what you would say like is a recession or demand destruction like you know there's there's precedent right i know you sent a lot of time research spent a lot of time researching this but like ECB firing the warning shot what to me was like i think they were the first ones to hike into into recession the last time we saw an oil price spike like this right yeah yeah yeah i mean i think at the end of the day like honestly not to get back to what war said but i think a lot of central banks are guilty of doing exactly that they rely on on data that's just lagging data. And they end up doing not necessarily what's required now, what would have been required

maybe six, 12 months ago. So there's just, that's the issue I think that we're seeing is just not using the right data. And I think for Canada and TIF and the Bank of Canada, it'll be interesting whether they actually start updating the kind of data that they use. So Warsh said that their task force should be done by the end of. the years. So it'll be really interesting whether other central banks start doing something similar, kind of following suit and revamping how they do use and collect data. So I'll be really interested whether if we see a change of tone from the Bank of Canada at their next meeting

following what we saw from Warsh. Yeah. You know, Stewart made a comment here. Like their mandate is to provide a stable dollar. How can he claim not to affect the price of goods? I think it's interesting. Like the Fed does also have a dual mandate, right? Like they have full employment as well. And I think until employment starts cracking, which it seems not to be like, I think, right? Like you're, I think there was a, there was a bad job sprint recently, but still like you mentioned Warsh basically saying like do, you know, if we're going to take payrolls, we have to kind of use the third revision. I'm of the opinion that like they're, you know, they could make the wrong move. But and I don't, I don't know. Like, am I being too bearish, like, or just trying to be too cynical and like,

and two, I don't know what the word is, but contrarian in my take on, or is it like, it's kind of hard to ignore that like the consumer is not doing well. Like, yeah, the U.S. feels like it's ripping just on AI and CapEx and the stock market and whatever. But the consumer economy, Canada and the U.S., both don't feel like they're doing exceptionally well right now. Yeah, but I think I think sometimes we'll forget the simplest explanation is I think the central banks may have PTSD from COVID and waiting too long. And I think, I think, think, you know, that is probably a fear. A lot of decentralized bankers were there during COVID and literally messed, well, they screwed up pretty badly and saw the worst bout of inflation

since the 1980s pretty much. So I think that is still weighing heavily. Yeah. I think a lot of them would rather be too awkish than not enough and have what happened during COVID repeat, even if it's a different set of circumstances. I think honestly, they're humans like all of us. I think, and I just think that's a big part of it. Like, it's as simplistic as it can be, I think that's a big part of it. Yeah. Having cash on hand is essential for any business. Traditional business accounts hit you with high fees

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Go to shopify.ca. That's shopify.ca. Cheching. Calling all DIY, do-it-yourself investors. Blossom is an essential app for you. It has been blowing up with now more than 50,000 Canadians plus and growing who are using the app. Every time I go on there, I am shocked. The engagement is amazing.

This is a really vibrant community that they're building. And people share their portfolios, their trades, their investment ideas in real time. And it's all built on the concept of transparency because brokerage accounts are linked. And then once you link your brokerage account, you can get in-depth portfolio. insights, track your dividends, and there's other stuff like learning, duolingo style education lessons that are completely free. You can search up Blossom Social in the app store and join the community today. I'm on there. I encourage you go on there and follow me, search me up, some of the YouTubers and influencers and podcasters that you might know, I bet you they're already on there. People are just

on there talking, sharing their investment ideas and using the analytics tools. So go ahead, blossom social in the app store and I'll see you there. Just to shift gears a little bit here because we have a few other topics we want to talk about. Do you see Osfi lowering the lending rules or that was released lowering the domestic stability buffer for Canadian big banks that was released this morning? No. So that was an interesting one. So I guess I was texting you, but you having issues with your text messages. Yeah, Apple's going to be trapped here for sure.

So I'll show this. This is actually a really, really interesting one here. And so they released this this morning. And essentially what it means in plain English is that the buffer is an extra capital cushion that Canada's big banks are required to hold. And by lowering it, OSFI, so that's the regulator. So the office of the superintendent of financial institution also regulates pension plans on the federal level and other.

I think it regulates a few other things too. and is giving banks a bit more flexibility to use that capital instead of keeping locked up as a regulatory cushion. And they're also reducing the CET1 capital ratio requirements, which are at an extremely high level right now for the big banks in Canada. So compared to pre-COVID, I think they're around 13, 13.5%. So you can definitely make the case that there is some room there. But essentially what they're saying is the banks are strong enough to, just hold a slightly smaller cushion and still remain resilient. But it's a bit contradictory because when you start reading the rationale,

and I'm highlighting this, I don't know if people can see it, but they're essentially saying the banks are strong, but there's really high vulnerabilities for this system too. So it's kind of funny that they're doing that, but they're arguing that they're doing it because they are trying to balance that safety net and the strength of the banks with also the need to support the economy. And the way it's written, honestly, with deploying capital, like it sounds like stuff out of the Canada Strong Fund, literally.

Like, it's hard to not think that they probably got a tap on the shoulder from the prime minister's office and say, okay, we need some help here to finance that. They talked about the rationale in strategic projects. This includes opportunity related to shift in trade policy, restructuring of supply change, evolving geopolitical tensions, and investments in defense, security, critical infrastructure, resources, and AI. So this literally, like, I don't know about you then, but this sounds like it's straight out of like the federal governments, the PM's office. I mean, like, so then what's the objective here? Like, what are the incentive that they're trying to create? Is it to lower capital controls or like lower the like credit contraction or liquidity contraction

that's happening? Because banks are like just. They're trying to stimulate credit. Yeah. I think that's just it's just a simple. Which is funny. So that's like basically fiscal side trying to do the job. I mean, Cardi's basically playing central banker then if you think it's coming from the PM's office.

Yeah. I mean, like that's my interpretation. The wording is just like, man, do you look at that and you start. looking at the budget and you start looking at the Canada Strong Fund. Like it's pretty, it's very similar wording. Like I and they're supposed to be a regulator and not like be influenced by the the federal government here. But I mean, let's be honest.

Like it's very the timing of it too just like less than two months after the budget was released or about two months after. It's just something smells like they they may have gotten, yeah, tap on the shoulder. That's my interpretation. I could be wrong. I don't know. I like it. I think it's interesting. I mean, we've said for a while, like, you know, when, when Carney got in, like, are we going to enter an era where you'll have kind of like two central bankers basically trying to like play Canada's economy and, and you'll get into like an era of, you know, stronger fiscal dominance where it doesn't really matter what the Bank of Canada does. If Carney's spending all this money to try and keep the economy stimulated, is the Bank of Canada less relevant? I mean, Very much so, I would say, if they're not really doing anything on the monetary side. And so Carney's just going to go fiscal side and stimulate the economy and play. You know, you have basically two central banks, kind of trying to game the credit environment now, spending to create jobs and economic growth and private savings.

And, you know, you've got a lot of progressive tax policy that's been trying to reduce costs there as well. So I think it's funny. It's funny. It's basically the other than happen. Yeah, they literally show like about seven, eight graphs showing how like dangerous the current setup is too, which is kind of funny when you read that. That's why like my suspicion is they,

yeah, the federal government is trying to stimulate the economy any way it can. And it just identified that as a way to potentially do it. But essentially like you just look down and they're trying to like, I don't know if it's a justification or just, they're trying to cover their rear ends, but they're just showing all these graphs that don't look too good for the...

Is that, what's that in the summary note or... Oh, yeah. Yeah, that's in the rationale. So, yeah, I guess the summary note, sorry. Yeah, that's what it is. So I was looking at that and it's just, yeah, I mean, obviously they must sing the Canadian banks are in a good spot right now. But again, the, you know, the allowance for credit losses are like at,

as percentage of their total assets are extremely high. So the banks clearly are provisioning. They have more than enough capital set aside for that. I guess Osfi's arguing, yes, despite all the risks. So, but at the end of the day, for me, it's just, it's a clear, like, government is trying to stimulate the economy and that's a way they're trying to do it. Yeah. Yeah, it's funny because, you know, they, like, bank, like, loan loss provisions are increasing,

yet they're saying, yeah, you can take on more risk. Is that like kind of what's happening right now? Well, I guess they're arguing that the banks have enough of a buffer despite the risk. I guess that's what they're arguing. Yeah, they're saying that there are major, like, that's how I'm interpreting it. There's definitely some big risk for the Canadian economy, but that the banks are positioned well enough and they can allow themselves to take more risk by lending more. Right.

That's funny, man. That's, which I don't know. To me, it's just like, it's contradictory, but maybe, you know, what the hell do I know? Well, like, it is. I would say, like, if, again, if banks are needing to de-risk their books, like, allowing them to get to a higher leverage position to, I mean, the only argument you could make is that, like, credit has, like, vintages, right? So the risk that's on their books is of an older vintage credit. Like, we know that your mortgages that are going to, like, and I really only pay attention to mortgages. and like a couple of the types of consumer credit that precede them.

So like auto loans and credit cards, let's say. But, you know, on your mortgage vintages, your mortgages that are going delinquent, the fastest are 21, 22, 23, 24. And so you could say, oh, well, you know, they're shoring up loan loss provisions for those and to try and make room for them to create more credit in this new credit environment where the risk has passed, right? And we're probably, you know, we're not in this, in this environment where rates are going to go up or prices that people used to purchase homes were way higher and they're at risk of loaned

values getting blown out by prices falling or whatever. Like, they might just be saying, hey, we need to stimulate and create a lot more new credit in this environment, which we perceive to be less risky. And we're setting aside, like the last five years. of lending where all that risk or a lot of risk was created and saying, yeah, they've done enough to shore up loan loss provisions to deal with that risk. I don't know. Like, that's the only, and I'm just trying to play the devil's advocate and give them the benefit of the doubt here, right? But like, that's kind of the only argument that I could say that they could make that would,

like, be a reasonable explanation. It's interesting, though, because, like, I mean, the primary way that banks would put this credit into the market is through mortgages, right? I think. I think I could be wrong, but like, I think that's probably one of the biggest ways. So will this be stimulative to the housing market? And is it, is it a, is it some, is it them trying to be stimulative towards the housing market? What are your thoughts there? I mean, I would say no based on their statement are the underlying intentions. Well, I feel like they'll never come out and say, okay.

I mean, like, you know, it's like the, the HST removal policy, you know, whether the, I mean, even that one, they, they kind of did say like they want to stimulate, well, they said housing affordability. Yeah. Like, but they, but, you know, the goal, like they did all, Ford actually mentioned. I think like, you know, he maybe misread his talking points that he got from Carney's team. And he was like, we got to get construction back on track, right? So I mean, they can't really say, hey, we're trying to floor the housing market. Like, they don't think they can do that.

I think it. Yeah. Yeah. Yeah, they're really selling it as stimulating the economy as a whole, but also supporting these, like, projects and the ever-changing geopolitical, you know, environment that we're seeing. So that's how they're framing it. Are they trying to put a little bit of a floor on the housing market, especially in the GTA or like,

I guess GTA and Greater Vancouver area, I think are the two artists hit markets with what I know. And obviously, I don't know as much as you do on that front. Maybe they are at the same time. Maybe it's like kind of trying to do, you know, hit a two birds,

one stone type of deal. That's very possible. Yeah. 100%. Having cash on hand is essential for any business. Traditional business accounts hit you with high fees while paying little to no interest on the cash you need for day-to-day operations. That was our experience too, until we switched to the new EQBank business account.

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work harder while keeping operations simple. Check it out today at eqbank.ca slash business. You know that moment when you're on the couch, shopping online, Shopping online, ready to checkout, and then you realize you don't have your credit card nearby, and you have no idea where it is. And then you see that purple button. That's ShopPay from Shopify. It completely changes the experience.

One tap, and you're done. No forms, no hassle. Honestly, it's happened to me plenty of times where I just abandoned the purchase because of that extra friction. From a business perspective, that really matters. Less friction means fewer abandoned cards and higher conversion. But Shopify isn't just about checkout. You can build your store with customizable templates,

manage inventory and payments all in one place, and even use built-in AI tools to speed up product uploads and content creation. Plus, you can run marketing campaigns directly through the platform to reach customers where they already are. See fewer carts abandon and more sales go, Cheching with Shopify. Sign up for your $1 per month trial today at Shopify.ca. Go to Shopify.ca.

That's Shopify.ca. Cheching. Calling all DIY, do-it-yourself investors, Blossom is an essential app for you. It has been blowing up with now more than 50,000 Canadians plus and growing who are using the app. time I go on there, I am shocked. The engagement is amazing. This is a really vibrant community that they're building. And people share their portfolios, their trades, their investment ideas in real

time. And it's all built on the concept of transparency because brokerage accounts are linked. And then once you link your brokerage account, you can get in-depth portfolio insights, track your dividends, and there's other stuff like learning duolingo style education lessons that are completely free. You can search up Blossom Social in the apps. and join the community today. I'm on there. I encourage you go on there and follow me, search me up, some of the YouTubers and influencers and podcasters that you might know, I bet you they're already on there. People are just on there talking, sharing their investment ideas and using the analytics tools. So go ahead, blossom social in the app store and I'll see you there.

Anything else you want to talk about? There's one more thing I wanted to go through, which was population growth, but I'm curious if there's any other stuff you wanted to chat on. I mean, obviously, I think we didn't really talk about a podcast about the Iran war. Oh yeah. You looked into that a little bit. Yeah. So like I guess, I mean, Friday of last week,

it was like there's a deal, you know, and you and you and I like sent it to each other and kind of like laughed and said like, oh, you know, so that, okay,

so there's a couple Trump things that came out, right? So there was the Iran thing. And I think everybody, like everybody, the market's sort of just like pricing in that it's wrong. Now at this point, I think like anytime he says, oh,

we're going to, we're going to have a deal. It's like, okay, like cool. Yeah, good one. And it seems like, you know, now the news is coming out that Iran has reclosed the straight and is not going to sign the deal and whatever. And I don't know if the pallets of cash are on their way over there already or what. But. And who's sending them? Who's the other question? Yeah. Yeah. But so there, yeah, so that was interesting. And then Kuzma as well, which Trump talked about. But I'll, I'm curious to hear your take on Iran. I mean, my, my, you know, like my thesis there hasn't changed that this was going to take a lot longer to.

be solved then the market was pricing in and then Trump was saying. And I think that it becomes increasingly difficult ahead of the midterms and it becomes near impossible after the midterms. So it feels like this might just be like two years. And then, you know, you would assume that oil prices aren't going in a positive direction ever again. And eventually the U.S. will burn through or at least be less impactful with their release of strategic petroleum reserves unless they are, are willing to spend a ton more and buy more reserves, which is another reason why the bond market might be saying, hey, here's, here's the, you know, the US is going to have to spend a ton of money. So let's just, you know, like, again, we, let's pay nothing for these bonds so we can get

a high yield because they have to, they have to use the debt. Like, those are, that's kind of my, my thesis there. But I, I've, and, and that eventually leads to oil prices, sustained inflation, consumer gets destroyed and we're in a recession by, I originally said like end of the year, I still kind of feel like, you know, like, well, we could see that happen by the end of the year. Like, you'd be in the first quarter of a recession by the end of the year in the U.S.

Like Canada isn't a technical recession, but it's very mild, so I don't even know if that's like worth using, right? Yeah, I mean, it's hard to say with the amount of spending that's happening on the AI front. I think that is, you know, it's just so massive. I don't know if it'll, like, when you look at the economy,

as a whole, right? Like, if they can't pull everything up. But for the Iran War, it's funny. Like, I hadn't seen that re-escalation, like, as crazy. And, like, it was only a couple hours ago. I think it was a small area. Yeah, exactly. Like, I was kind of just catching up and just doing some notes here for a live show. And literally within, yeah, like, the last hour things changed. And essentially, like, we'll have to see whether the talks resume or not. But clearly the market saw it as a positive. The two-year bond yield, this one was interesting because this one is following a bit more what market expectations are on short-term rates. So a lot of experts will say, look, look at the two-year U.S. bond yield. You'll know what the Fed's fund rate will be.

And it's close to 4.2, I think. Right now, the longer yield, the 10, 30 years, that kind of stabilize a little bit, come down following the announcement. So we'll have to see whether it starts going back up. maybe the markets are just waiting to see here. And obviously, if, like, if people had looked at the memorandum of understanding the MOU, like, let's just assume that the clash that's happening right now in Lebanon is not happening. Like, this is the vaguest thing I've ever seen. I don't know if you looked at it.

It's not super long, but did you look at it, the MOU? No, I didn't. So, I mean, it's super vague. So essentially that there's just, like, a few things where they say, Like the, like, the main issues, they're just saying the MOUs that they will be talking about it. Right. So that's essentially what it says. And that there's a ceasefire.

Yeah. For 60 days. Like, we're going to, yeah, we're going to do some studies on a plan, you know. Yeah, exactly. It's a plan to have a plan. Plan to make a plan. You know, there's still some questions whether if the shipping will return to normal, if it does or if it ever does. The MOU, there's also like a safe passage through the straight that will be toll free for only 60 days after that.

What happens? It does seem to give Iran some leeway. There's a 300 billion reconstruction fund that no one really knows where the money would come from. The U.S. said it wouldn't be coming from them. Does it come from sovereign wealth funds, direct investment from private companies, other governments? We don't know. The nuclear issue is up in the air. That is the biggest issue.

It's still up in the air that says it will be negotiated. There's also a question what, you know, key stakeholders in the region, are they on board or not? Because the impression that we got in the news and the more I've listened to some experts to is that the U.S. did this deal with Iran and Israel wasn't really involved and other Gulf nations weren't that involved. They may not like the kind of regional influence that Iran may be gaining with this, Israel and Nitzhan has its own security objectives and concerns. So what may work for the U.S. might not work for Iran. There's no mention of not using the money for just missiles, whether like obviously just regular missiles that could reach Israel. So there's nothing in that language.

The Lebanon issue is also a wildcard with Hezbollah and Israel. You don't know how will that affect it. And it is part of the MOU. So there's just a whole lot of questions even if you kind of don't look at the escalation, I guess that happened right now in Lebanon, so we'll have to see. But there's a whole lot of questions around that. And then you have to look at the oil supplies that was lost during the war. How long will it take to actually get that back online?

I mean, 11 to 15 million barrels per day is not insignificant. And then you talked a little bit about the strategic reserves. I mean, the governments around the world released a whole lot of these strategic reserves. and the U.S., I was looking at, it hasn't been this low in decades for the U.S. Yeah. And governments get into an issue, even if everything is resolved in the next 60 days and everyone, you know, sings kumbaya and everything is good, like as it was pre-war. Like, governments can't start refilling the strategic reserve extremely quickly because if they do,

then they put upward pressure on oil prices. So they have to strike that balance between refilling them, but not refilling them. but not refilling them too quickly so it doesn't push oil prices higher. So there's a whole lot of questions and I think the market is just maybe to focus on the AI trade. I'm not quite sure, but seems to think that there is not all of these risks involved. And that's been a bit of a head scratcher for me, at least ever since this started. Well, it's funny.

Like I think we kind of made this joke the other day, like when we're on with Zela from on the, when we're on the BMO podcast where we were saying like, you know, we talk so much about macro, but like it feels like it's irrelevant to your world right now because like you can give the most like bearish macro news and the market like still rips. In my world, it's a little different because, you know, people buy houses with credit and uncertainty in the macro has led to rate uncertainty and also just banks pricing in more risk so they're increasing their spreads a little bit. And then rates also like, you know, your five year fixed historically the most common. If you combine all of the different fixed rates, they would be the most common type

of mortgage credit right now. And, you know, but the most individually most common or most popular is actually the variable. But that seems to be like, that seems to be where we're seeing more of the impact is on the housing market, where we're now trading four months in a row, five months in a row, we're below last year's housing market, sales volume. And last year was one of the worst years ever, right? Per capita, it was the worst year ever and we're now going to beat it. So, it like is the stock market just detached from macro at this point like and just not doesn't care because it's so bullish on AI yeah i mean it could be i think um yeah no that's that's a very good point i don't know you just see all of these things all of these risks and you just wonder at some point like something's going to to

break i i'm trying to make sense of it but i just can't make sense of it if you start listening to some experts and all of these things work and just kind of start digging a little bit than just the headlines on what's happening in the AI space. I mean, there's a whole lot of risk for the global economy right now that just seem to be completely brushed off. And how can the macro, like how can investors just ignore that, right? Like, I guess is it just like they're, you know, they're basically just saying like AI is so strong that it will, like it doesn't matter. Like macro doesn't matter. Rates don't matter. Like are they pricing in the actual possibility that they that it thinks that we're heading towards this like kind of post work like post

money environment like I don't know I mean I know I'm sounding like sounding crazy right now but like this is the stuff yeah this is the discourse that you hear right now yeah I mean it's it's hard to say I think right now the markets um I guess you know I kind of think as you know I play you know poker like every now and then and I think there is a very similar thing with poker and investing and just that relate to markets is in poker fear drives action. So it could be fear of losing money or fear of looking stupid like whatever. You have to figure out what fear is driving a certain player. And then you kind of act accordingly. And I think the market is the same way, right? So right now, I think the fear of missing out on this amazing AI trade on this revolution. I mean, every day you

look at the stock market, you see semiconductors are just crushing it. just going up and that fear of missing out is just overtaking everything else. But as soon as you, it's a pendulum. The markets are always like that. So right now we're on the high pendulum and that fear of missing out is just throwing to the side all kinds of, you know, perception of risks in the market. Just making investor disregard that. And then at some point, it will go to the other side and where fear of capital,

lost, losing money will take over. And that's when you can fear of overpaying. Fear of overpaying. I mean, whatever it is, right? Like, I think that's just what it is. I think that's simply put, I think that's what it is because I think we, I think there's no question that we're in a bubble right now for AI stocks specifically, the ones that we all know. Yeah. Just like where in the bubble are we is the hard? Exactly. Yeah. You know, it was like, you could say that. Like, I mean, everybody said that. about Canadian house prices for the past 15 years and nobody was necessarily wrong, but had you traded on the assumption that the end of the bubble was close, you would have not done well at all.

So that's the big challenge, I think, is actually figuring out where, like, what's the trade, right? It's very easy to be directionally right. It's hard. Timing's the hard part, I think. Yeah, exactly. I think it's that. But it can also be true, and we've talked about this before, Like it can be true at the same time that you're in a bubble, but you're also looking at a technology that will just revolutionize like how we do things. Five, 10, 15, 20 years from now. I think both things can be true at once. And I've had a whole lot of people kind of push back. Well, that was like the internet, right?

Like that was like the internet when, I mean, that didn't stop the internet from being in it like creating the dot com bubble and people picking the wrong players. Like a lot of these companies could just not exist in, in, uh, many years. Some might over lever and get destroyed on this this Cappex spend. Like everybody's taking on debt to do it, right? Yeah, it didn't prevent that from happening in, you know, 20 years ago. Yeah, and if you look back to, I think you're probably a bit young for that. But in the 1990s, I remember like being all Alta Vista and you had Netscape and all that stuff. If you asked anyone the late 1990s or 2000s, if they think, they thought back then that

the internet would be what it is today. Like they probably no one would have believed you beyond their wildest dreams that it would be that. Like everyone's always terminally online on their phones at all times with a tiny little touchscreen in their pocket, talking to each other, don't even have social lives outside of this stuff. Like, yeah, I mean, that would have been a hard reality to believe. And not using your landline, your landline phone line to actually dial up and go on the

internet. So just I just want to mention that because we probably can't even conceptualize how much AI will change the world in like 10, 15, 20 years from now. But it still doesn't mean that we're in a bubble. And I think it's funny because I've had this discussion and arguments sometimes with people that are super AI bulls. And I'm like, I don't disagree that, you know, I think it's going to be something that really will change the world. But still doesn't mean we're not in a bubble right now. but I think that doesn't mean that the valuations are correct. No, exactly.

Especially that we're seeing now, like the token maxing era, you're starting to see a lot of businesses actually start regulating how much their engineers can use AI to code because it's getting too expensive. Like now that they're switching to API plans and stuff. Like AI, the economic incentive to use AI at scale, like made a lot more sense when it was being subsidized. will the market like will it be as valuable of a tool if those token costs aren't heavily subsidized and the answer appears to be no or like will it be as well the adoption be as high if if the answer that question is no then the models really need to change on how much revenue these companies or maybe not revenue but how much use is happening from these companies and then you know that eventually I think like IPO ends up being a bit of a catalyst and we talked about this on the BMO

guess as well, but like, you know, these IPOs now, these companies don't have to be accountable really to anything right now. They just have to be accountable towards like progressing towards an exit to be like they're with VC capital, which is like, you know, pretty high risk. But like you go to the stock market and indexes and like large funds and, you know, SpaceX would be the first one, but then you get to open AI and Anthropic. Like we're probably going to have three back to back multi-trillion dollar IPOs. One, that's going to pull a ton of liquidity out of the market from other stocks into their stock, but two, it's also going to create a layer of accountability that I think not immediately, but clearly based on SpaceX, but eventually requires that they get priced

into reality a bit, right? I don't know. Yeah. No, it's true. How long will the market tolerate these companies losing massive amounts of money? So we don't know once they're public, because they have to be more transparent. And the other good, the other question worth asking that I think a lot of people aren't asking right now is you're seeing these hyperscalers spending, you know, hundreds of billions of dollars, what happens is the bottlenecks just start really pushing back how quickly these data centers can come online. So think about the electrical, the power demand, the electrical grid, the power that needs to be used for AI or the locations.

A lot of communities now are pushing back on having those data centers in their communities. like that could start impacting a whole lot of that spend or have it be put on hold because you have some physical limits, you know, yeah, actual physical limits to doing that or the trades even required to build these data center. I think sometimes we just take for granted they're just putting all this money in cap eggs, but, you know, there are some bottlenecks, real world bottlenecks that they'll also have to be dealing with. For sure. Yeah, to completely agree, man. Anything else you wanted to add before we go. I just only go to the population. Yeah. Okay. All right. Did you, did you see this? I saw you, you posted something on it. Yeah. Was it a temporary foreign workers

decline or something like that? Yeah, so it's the entire population. So third quarter in a row that Canada has now seen population decrease down 0.1%, so 0.4% annualized from January 1st to April 1st, 2026. Total population. Wow. Yeah. Yeah. So, I mean, most of it comes from temporary foreign workers. Permanent immigration and natural increase also slowed during the first quarter of 2026. One of the things like, a lot of landlords are not loving you right now, Dan. I'll just say that. Well, I mean, like we, you know, we mentioned that this would happen and that people should make their models, you know, their, their deals resilient against changes to, like, have people who didn't stress test their rent, their, their real. investments with rents falling, you know, a lot of the reeds that we've discussed on other episodes included are going to have a bad time in this market, right? Like rents are falling massively as a result

of, of this trend, right? And actually, did you see the Fed paper I posted on, uh, on X? No, I didn't see it. What is it? It was basically like, you know, we have papers on this. Oh, geez, the White House just tweeted Iran is finished too. So this war is not going anywhere, uh, anywhere. Oh my God. Let me find this Fed paper here. So, so it says, Dallas, fed unauthorized immigration drove 30% of home price growth and 20% of rent rent growth in the average metro from 2021 to 2024. And like the unauthorized piece, let's set that aside. Canada's population growth was massive and we saw obviously a similar factor. I'll pull up some charts like that show, let me just pull it up here, your rent, rent inflation. You see rent CPI and national

population growth. And, you know, you, you. Basically, if I pull this, I'm going to pull out, get rid of my housing market here and your year over your change. Like, look at how well those two track each other, right? So, you know, population growth is going to pull, declining population growth is going to continue to pull rents down. And rents are the leading indicator on house prices through one, the way that they reduce NOI, which reduces the amount that a investor is willing to pay. If the cap rate, the yield that their searching doesn't change, which why would it right now if they don't have a change in the interest rate to peg it to? And then, sorry, go ahead. Yeah, I'm just wondering, too,

like, are you seeing still a lot of completion on the purpose built rental front, too? That's probably like pushing even more pressure on rental prices. Yeah, so like housing starts are down slightly, but if I pull up, like, when you say down, it's like really easy to. Yeah, because Warren, there are a lot of like 21, 2022 condo projects, at least in Ontario. I saw a lot of in Ottawa that were just being converted to purpose build rentals or to rental projects, yeah. Yeah.

Yeah. So like anybody who has a condo pipeline who has units in the like in the pipeline that were contemplated as condo is pivoting to purposeful rental. They don't really have a choice, right? Like unless you, unless you're like a legacy landowner and you have a lot of time on your side. But if you bought the land recently, which like if you're in the condo trade, you probably would have.

like those guys were basically like buying inputs, land, and then selling outputs. If you're trapped kind of with a couple of units that, that are a couple of projects that don't no longer work because there's no exit liquidity to sell those condos into, you would be trying to pivot to get those into purpose belt rental to the best of your ability. And you, some projects work, some don't. The investors certainly have to leave a lot more equity in the deal to make the numbers work. But basically like, you know, the pipeline will probably. probably in Toronto.

Like the idea that everybody's saying, oh, you know, we're not going to like, they're going to have zero supply by 2028. I just don't like, I think that the market will find a way to keep it supplied on the purpose built rental side of things. We'll probably won't see a lot of condo supply, but I don't think that we'll be, we might, you might get a one or two year gap where the market supply is down, maybe 28, 29. And if population growth resumes, which is projected to by then, 28, I think 29, you might see like a little bit of a, the start of a recovery take place in the, with an excess demand

scenario. But beyond that, I think like at a national level, we're building more rental, we're building more residential than we have ever. Rental as a percentage of total construction is the highest that it's ever been or near the highest that it's ever been. So I think there's a lot of factors that would say, you know, we're probably going to be in an excess supply situation longer than we need to worry about an excess demand situation in the, in the next like three to five years. Yeah, no, I was just curious because you're showing that in the population decline and it just kind of feels a double whammy, right? For for landlords right now. So they're getting population decline, more supply in the markets too. I just, am I wrong to think that there's going to be downward

pressure on rental prices for at least another year? Like, you tell me, like, you know the space more than I do? Yeah, so I would say that you are correct. Like, it would be really, reasonable to assume that you would continue to see downward pressure on rents or at least like they will like eventually they'll get to a point where a new household formation becomes popular or possible people feel compelled to maybe like you know people who are staying in their parents basement or you know whatever like decided not to go rent to place maybe roommates roommates was for a period of time the fastest growing household type in Canada you know those when do that when does it become economical for those households to actually go and do new

household formation. And that's when you start like maybe seeing rents floor a little bit. We, I don't think we've seen it yet, right? And like, you can see I have this chart up here that shows condo starts versus rental housing starts in Canada. And like the, and this is index to 2005. But like, even if I go to just like dual access, you can see basically like your condo starts have dropped substantially and your rental starts are hitting all time highs. So, you know, programs and this is, this is more of that fiscal side that I mentioned. Like, programs like CMHC, MLI select, which gives large landlords the ability to take on 50-year mortgages and buy down their monthly debt service, which increases their net yield, right?

Or their net, yeah, like, I guess the ability reduces their burden on their debt service coverage ratio. So it allows them to make worse deals, cash flow, basically. It's gotten a lot of, as a result of the taxpayer ensuring these loans, it's gotten a lot of supply created and that then that's going to drive rents and and prices down yeah no that's that's really interesting i mean it's so different than what we saw during the pandemic it's like a almost again speaking of pendulum it's uh it's swung way on the left side and now it's on the right side but aside from that was there anything else no i think we're good man that was a good one yeah yeah was a good

one too i'm yeah i'm just checking here like i had a few notes but yeah we talked about everything i mean we skipped a week so there was a bit more stuff to talk about. We had the OSFI thing released earlier this morning. So that was interesting too. Yeah, I did. That was a curveball. I didn't even know that that one. So that was good. I like that. You got a fix, get Apple to fix your I message. I know, man. I'm working on it 100%. Okay, cool, man. Well, I'll see you again in a week. For those of you who are tuning in, thanks a lot. Appreciate it. Always happy to have you on here. And we'll see you again as soon as we can. The Canadian Investor Podcast should not be construed as investment or financial advice. The host and guest featured may own securities or assets discussed on this podcast.

Always do your own due diligence or consult with a financial professional before making any financial or investment decisions.