PrefBlog

Canadian inflation was up a bit in December:

Statistics Canada says the end of the federal government’s tax holiday a year earlier pushed the annual pace of inflation up two ticks to 2.4 per cent in December.

A poll of economists heading into Monday’s data release had expected the annual inflation rate would hold steady at 2.2 per cent.

Statscan said Ottawa’s move to take GST off some items for two months starting mid-December in 2024 dropped prices for dining out, alcohol, children’s toys and more a year earlier, but those discounts fell out of the annual comparison and pushed the Consumer Price Index higher to end the year.

That led to an 8.5-per-cent annual increase in the price of restaurant meals, which Statscan said fuelled the acceleration in the headline number. Some grocery items including potato chips and confectionery goods were also included in the tax holiday and saw annual price jumps in December, the agency said.

Overall, the cost of food bought from the grocery store rose 5 per cent annually, though Statscan said price levels were broadly unchanged month-to-month. Grocery store inflation has been accelerating in recent months, rising 4.7 per cent year-over-year in November.
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Andrew Grantham, senior economist at Canadian Imperial Bank of Commerce, said while the distortion from the “tax holiday” was expected, what caught forecasters off-guard was the jump in transportation costs last month.

While the cost of air transportation was marginally lower year-over-year, Statscan said airfare prices surged 34.5 per cent month-over-month – outpacing the previous year’s holiday price hike. The cost of travel tours also rose on a monthly basis, which Statscan attributed to higher prices for U.S. destinations.

Quadravest has announced:

Dividend 15 Split Corp. (the “Company”) is pleased to announce it will undertake an offering of Preferred Shares (TSX: DFN.PR.A) of the Company. The offering will be led by National Bank Financial Inc.

The sales period of this overnight offering will end at 8:30 a.m. EST on January 16, 2026. The offering is expected to close on or about January 23, 2026 and is subject to certain closing conditions including approval by the TSX.

The Preferred Shares will be offered at a price of $10.45 per Preferred Share

The closing price on the TSX of the Preferred Shares on January 14, 2026 was $10.52.

Since inception of the Company, the aggregate dividends paid on the Preferred Shares have been $11.75 per share. All distributions paid to date have been made in tax advantaged eligible Canadian dividends.
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PerpetualDiscounts now yield 5.57%, equivalent to 7.24% interest at the standard conversion factor of 1.3x. Long corporates yielded 4.92% on 2026-1-7. Therefore the pre-tax interest-equivalent spread (in this context, the “Seniority Spread”) has remained steady at the 230bp reported January 7.

Central bankers have united behind Powell in his defence of central bank independence:

We stand in full solidarity with the Federal Reserve System and its Chair Jerome H. Powell. The independence of central banks is a cornerstone of price, financial and economic stability in the interest of the citizens that we serve. It is therefore critical to preserve that independence, with full respect for the rule of law and democratic accountability. Chair Powell has served with integrity, focused on his mandate and an unwavering commitment to the public interest. To us, he is a respected colleague who is held in the highest regard by all who have worked with him.

Christine Lagarde, President of the European Central Bank on behalf of the ECB Governing Council

Andrew Bailey, Governor of the Bank of England

Erik Thedéen, Governor of Sveriges Riksbank

Christian Kettel Thomsen, Chairman of the Board of Governors of the Danmarks Nationalbank

Martin Schlegel, Chairman of the Governing Board of the Swiss National Bank

Ida Wolden Bache, Governor of Norges Bank

Michele Bullock, Governor of the Reserve Bank of Australia

Tiff Macklem, Governor of the Bank of Canada

Chang Yong Rhee, Governor of the Bank of Korea

Gabriel Galípolo, Governor of the Banco Central do Brasil

François Villeroy de Galhau, Chair of the Board of Directors of the Bank for International Settlements

Pablo Hernández de Cos, General Manager of the Bank for International Settlements

Note: Other central banks may be added to the list of signatories later on.

CI Financial is buying Invesco Canada:

CI Financial Corp.’s N/A
asset management arm is taking over Invesco Ltd.’s Canadian fund business, acquiring control of about 100 mutual funds and exchange-traded funds (ETFs).

CI Global Asset Management is buying the management agreements for Invesco’s Canadian funds, which oversee a combined $26-billion of assets, expanding the lineup of products it can offer to clients.

Financial terms of the deal were not disclosed.

The two companies are also entering a long-term pact to have Invesco’s affiliates help manage 63 funds with $13-billion under management, providing portfolio management services.
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CI Financial was itself acquired by Abu Dhabi-based Mubadala Capital in a $4.7-billion privatization deal late in 2024, following an audacious U.S. expansion led by chief executive officer Kurt MacAlpine through which the asset manager took on billions of dollars of debt.

The privatization of CI came at a time when the company was under pressure from shareholders to take its U.S. arm public and show it had a plan to manage its heavy debt load.

This latest deal with Invesco “highlights how operating as a private company allows us to unlock new opportunities to create meaningful long-term value for CI and our clients,” Mr. MacAlpine said in a news release.

Invesco used to have a Canadian preferred share ETF, used as a comparator for my MAPF, but they closed it. The last performance comparison was for March, 2023.

The TXPR price index set a new 52-week high today of 698.02, a step beyond the old mark of 697.68 set 2026-01-09.

Jerome Powell has released an extraordinary statement regarding Trump’s latest intimidation attempt:

Good evening.

On Friday, the Department of Justice served the Federal Reserve with grand jury subpoenas, threatening a criminal indictment related to my testimony before the Senate Banking Committee last June. That testimony concerned in part a multi-year project to renovate historic Federal Reserve office buildings.

I have deep respect for the rule of law and for accountability in our democracy. No one—certainly not the chair of the Federal Reserve—is above the law. But this unprecedented action should be seen in the broader context of the administration’s threats and ongoing pressure.

This new threat is not about my testimony last June or about the renovation of the Federal Reserve buildings. It is not about Congress’s oversight role; the Fed through testimony and other public disclosures made every effort to keep Congress informed about the renovation project. Those are pretexts. The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the President.

This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions—or whether instead monetary policy will be directed by political pressure or intimidation.

I have served at the Federal Reserve under four administrations, Republicans and Democrats alike. In every case, I have carried out my duties without political fear or favor, focused solely on our mandate of price stability and maximum employment. Public service sometimes requires standing firm in the face of threats. I will continue to do the job the Senate confirmed me to do, with integrity and a commitment to serving the American people.

Thank you.

Good for you, Mr. Powell!

Tiff Macklem has indicated his support of Powell:

Macklem, who also spoke in Powell’s defence back in September as pressure mounted from the Trump administration, said in a statement Monday that the Fed chair “reflects the very best in public service” and has his “full support.”

“Chair Powell is doing a very good job under difficult circumstances, guiding the Fed to take monetary policy decisions based on evidence, not politics,” Macklem said in a media statement.
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Macklem said the independence of central banks is critical to delivering price stability and gives monetary policymakers the space to take difficult decisions that benefit the economy, “free from short-term political interference.”

A bipartisan group of former Fed chairs and top economists on Monday compared the Trump administration’s actions to moves made in more impoverished countries.

The “media statement” does not appear to be on the Bank of Canada website.

The TXPR price index set a new 52-week high of 697.68, edging the old mark of 697.57 set yesterday.

Jobs, jobs, jobs!

Statistics Canada says a boost in the number of people looking for work in December drove the unemployment rate higher at the end of the year.

The agency said the economy added 8,200 jobs last month, topping economists’ expectations.

The unemployment rate rose to 6.8 per cent in December, Statscan said, up from 6.5 per cent in November.
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Average hourly wages rose 3.4 per cent year-over-year in December, cooling from 3.6 per cent in November.

And in the US:

The American labor market has entered 2026 in respectable shape, continuing to muddle through challenges even as it loses strength.

Employers continued to hire modestly in December and the unemployment rate declined, federal data showed on Friday, but hiring across 2025 was the weakest in five years, driven in part by government staffing cuts and tumultuous public policy.

Employers added 50,000 jobs in the last month of 2025 and the unemployment rate fell to 4.4 percent, the data showed. Average hourly earnings grew at 0.3 percent on a monthly basis in December and 3.8 percent on an annual basis, an acceleration compared with previous months.
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Excluding health care and social-assistance sectors that added about 700,000 jobs last year, private-sector job growth for the year was just over 20,000, said Samuel Tombs, the chief U.S. economist at Pantheon Macro, a research firm.

And now it’s time for … PrefLetter weekend!