Rates signal peak, consumers spending streaks and supply leaks

The Bank of Canada (The BoC) signals it has reached peaked rates as the BoC held its benchmark overnight interest rate steady at 5% at its first meeting of 2024. Have rate hikes ended? If economic conditions evolve as expected BoC thinks so. Also, the BoC says inflation should hold near 3% over the first half of 2024, before slowing to its 2% target in 2025.

In the U.S. personal spending rose by 0.7% in December, showing the resilience of the U.S. consumer amid tight financial conditions. However, there are calls for more stimulus in China as the pace of growth was strong relative to the third quarter, there were pockets of weakness that weighed on results.

Shipping oil, and other products, through the Red Sea have been disrupted in response to Houthi rebel attacks. Meanwhile, ongoing tensions in the Middle East are keeping investors uncertain to the supply of oil from the region.

Read the full market commentary on canadalifeinvest.ca, including the following topics:

• The BoC signals its has reached peaked rates
• U.S. consumers stay strong
• Calls for more stimulus in China
• Red Sea troubles cause concern about supply disruption

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