The last few weeks have been a little bit of respite of what has seemed like months of news that has hurt the markets: broad levels of volatility have declined, bond yields have been stable, and equity markets have pared some of their losses. While there are a host of factors that may be responsible for the renewed stability, maybe, just maybe, the overarching driver may be signs that inflation has peaked, for now. While inflation rates remain very high from a historical perspective, one hopes that this trend is our friend.

 

Part of the more optimistic tone that has emerged over the past month stems from an expectation that central banks, like the Bank of Canada and the U.S. Federal Reserve, will be able to moderate the pace at which they have been raising interest rates in the not too distant future. While both are expected to raise rates meaningfully once again in September, there is a growing view that any increases beyond that will be tame in comparison.  For what it’s worth, RBC is forecasting that inflation will finish the year still above 5% in North America, and interest rates will continue to go higher. 

 

Onto “growth” of another matter, its interesting to see that possibly in many of our lifetimes, we may actually hit peak global population.  Since the 1960s, when the global number of people first hit three billion, it has taken a bit over a decade to cross each new billion-person milestone.. Sometime in the next few weeks it is estimated we will cross eight billion people.  The world might never make it to 10 billion, or even nine billion, and that the world’s major demographic problems won’t stem from the growing masses but from shrinking countries, aging populations and dwindling workforces.  I’m not predicting meteor strikes or alien invasions (but that would be so great to have sentient beings come to Earth!).   As people have greater opportunities to pursue education, they have smaller families. 

 

 

This isn’t a forecast of doom and decline, but rather one in which health and education simply improve, lower mortality, better housing, and medium levels of immigration.  Not sure if there is a “tradable idea”, but I thought it was neat to contemplate a peak Global population.

 

Will be back in two weeks, with a “back to school” musing, and a save the date for our next presentation.

 

Have a great weekend!