Dear valued client,
Markets rose yet again this week as inflation in the U.S. continues to dissipate. CPI figures for November came in at 3.1% (compared to 3.2% in October and 3.7% in September). The Federal Reserve, as expected, decided to hold the overnight lending rate at 5.25-5.5% in its meeting Wednesday.
This development is very much aligned with the Bank of Canada’s decision last week and in tune with other Western nations’ central banks’ strategy. Fed Chair Jerome Powell said inflation had “eased” but also added, “No one is declaring victory. That would be premature.” Even so, some investors are betting rates could start to decrease as early as March of 2024.
With other priorities on the table for lawmakers (domestic strikes, war in the Middle East, mayhem at the southern border), Ukrainian President Zelensky made a trip to Washington this week in an attempt to persuade Congress to cut his country another cheque to bolster their resistance against Russian forces. President Biden supported Zelensky’s bid, stressing the importance of the approximately $60 billion in additional aid to fend off Russia’s invasion. Congressional Republicans, however, were not as lenient. House Speaker Mike Johnson said more aid for Ukraine is contingent on passing U.S. – Mexico border reforms.
Roughly half a million public sector workers (about 5% of the province’s population) in Quebec remain on strike this week. Similar to other recent strikes, this one is particularly fueled by a higher cost of living. According to public reports, the unions rejected an initial government offer of a 12.7% pay raise over five years. The unions contend that if inflation stays high, the offer would work out to a net decrease in pay. It’s also important to note that Quebec runs a much more inexpensive civil service than the rest of Canada. Everyone from teachers to police officers to the premier earn wages that are measurably lower than counterparts in Ontario, B.C., or the Prairies.
“A man should conceive of a legitimate purpose in his heart, and set out to accomplish it. He should make this purpose the centralizing point of his thoughts. This is the royal road to self control and true concentration of thought.” – James Allen
Have a terrific weekend,
PW
