PrefBlog

So inflation is now the highest it’s ever been during my career!:

The Consumer Price Index (CPI) rose 4.8 per cent in December from a year earlier, the quickest pace since 1991, Statistics Canada said Wednesday. The result matched the median estimate from analysts and accelerated from November’s 4.7-per-cent pace. It was the ninth consecutive month that inflation has exceeded the Bank of Canada’s target range of 1 per cent to 3 per cent.
…
Grocery prices rose 5.7 per cent in December for the highest annual inflation in that category since late 2011, which Statscan attributed to supply issues and unfavourable weather. New border controls on unvaccinated truckers could put further pressure on food prices.
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The average of the Bank of Canada’s core measures of annual inflation – which strip out extreme price swings and give a better sense of underlying trends – rose to 2.9 per cent from 2.7 per cent, the highest since 1991.

In apparent response, the GOC-5 rate increased to 1.71%.

PerpetualDiscounts now yield 4.80%, equivalent to 6.24% interest at the standard equivalency factor of 1.3x. Long corporates now yield 3.57%, so the pre-tax interest-equivalent spread (in this context, the “Seniority Spread”) has narrowed dramatically to 265bp from the 295bp reported January 12.

This entry was posted on Wednesday, January 19th, 2022 at 7:35 pm and is filed under Market Action. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.