Independent Accountants' Investment Counsel Inc.

(source: Bloomberg, MSCI and ARG Inc. analysis)


What happened last week?

  • For many the most significant change affecting daily life was the drop in the price of crude oil.  It will help lower inflation and improve the perception of inflation through the gas pump.  The price of oil is below its 2022 start, and within pennies of its price from one year ago.

  • However, the major domestic economic news was the action taken by the Bank of Canada on Wednesday morning.  The "overnight rate" was raised by 0.5% (50 basis points).  It was the seventh consecutive increase, dating back to early March.  During the last 9 months the rate has risen from its effective, lower boundary of 0.25% to 4.25%. 

    • During the announcement, Tiff Macklem, Governor of the Bank of Canada indicated that a pause in rate hikes was a possibility when he said, “But we recognize that we have raised interest rates rapidly and that their effects are working their way through the economy. In other words, we are moving from how much to raise interest rates to whether to raise interest rates.”  The widely held belief is that interest rates will reduce demand to match supply and reducing and eliminating rate hikes at the appropriate times will allow inflation to be mitigated without pushing the economy into a recession. (Source1, Source2, Source3)

  • More inflation news emerged last week with the U.S. Producer Price Index (PPI) release.  The PPI measures inflation at the wholesale level.  Producer prices rose 0.3% in November and 7.4% for the 12 months ending in November.  In October, the 12-month PPI increase was 8.1%.  The PP began 2022 over 10% and had exceeded 11% for four months (March to June) before moving downward during late summer and autumn to its current level.  (Source)
  • Inflation news will be in sharp focus again next week as U.S. consumer prices and a Federal Reserve monetary policy announcement are scheduled.


What’s ahead for this week?

  • In Canada, no major economic announcements are scheduled.

  • In the U.S., consumer inflation data will be released on Tuesday, and may provide an indication of the Federal Reserve’s monetary policy actions scheduled for this coming Wednesday. 

  • Globally, on Thursday the European Central Bank will release their interest rate decision, and the Eurozone will publicly announce consumer inflation on Friday. 

For more information contact: [email protected] | Tel (519) 291-2817 | 135 Main Street, East | PO Box 68 | Listowel, ON N4W 3H2


This report is produced by Independent Accountants' Investment Counsel Inc (“IAIC”) in conjunction with ARG Inc.  All graph and chart statistical data contained in this report has been supplied by ARG Inc. The views and opinions expressed in this report are based on market statistics.  No guarantee of outcome is implied, and opinions may change without notice.  Investors should not base any of their investment decisions solely on this report nor should any opinions expressed within this report be construed as a solicitation or offer to buy or sell any securities mentioned herein.  Although the information contained in this report has been obtained from sources that IAIC believes to be reliable, we do not guarantee its accuracy, and as such, the information may be incomplete or condensed. All opinions, estimates and other information included in this report constitute our judgment as of the date hereof and are subject to change without notice.

Please contact your IAIC representative if you have any questions regarding this report. 


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