Kingsmill's Investment Miscellanea - Friday December 9th, 2022

December 09, 2022 | Joshua Kingsmill


We are looking forward to hosting you next Monday for our “Investing Opportunities in a higher Interest Rate Environment” . Its timely, as we all know, this week, the Bank of Canada announced a further raise to interest rates (the 7th one this year, which has never happened). This translates into a prime lending rate at Canada's major lenders to 6.45%. That will increase borrowing costs for anyone with a variable rate loan.


Although the Bank of Canada stands ready and willing to act forcefully if inflation continues to surprise to the upside, with interest rates now firmly in restrictive territory they are now taking a “more data dependent” approach and “will be considering whether the policy interest rate needs to rise further” rather than debating the size of the next move.


Underpinning that decision were the early signs that tighter monetary policy has begun slowing the economy; consumption of goods has decreased substantially and demand is easing in interest rate sensitive sectors of the economy. These factors have led to early indications that inflation is losing momentum, but it’s still too early to declare victory in the Banks’ opinion with excess demand in the services sector continuing to push prices higher.


I think this gives a good overview of what we will discuss next week on our call.


Both Avril and I are on the mend for various levels of not feeling well: an interesting un-intended consequence of that last few years in relative isolation has been, according to my doctor, just generally lower immunity we all have. Fortunately, you won’t be able to catch anything on this call (well, except maybe catch some good insightful information!)