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Market Update 📊
Claire Fan, an economist at RBC Economics, part of the Royal Bank of Canada, shared some findings from a recent report about Canada's inflation rates in March. According to the report, although overall inflation slightly increased to 2.9% from 2.8% due to higher energy prices, there are signs that inflation pressures are easing. For example, food prices rose more slowly and the cost of dining out remained stable. On the other hand, energy prices went up because of higher oil prices linked to global issues.
The report also highlights that the core measures of inflation, which look at the underlying trends, have improved. These measures are now below the target range set by the Bank of Canada for the first time since mid-2021. Specifically, excluding costs related to energy and housing, the "supercore" inflation measure has dropped. However, housing costs continue to rise significantly, with rent inflation hitting its highest rate since 1983. Despite these increases, the Bank of Canada expects inflation to gradually decrease while the economy grows stronger, and they anticipate possibly lowering interest rates soon.
Key Takeaways 💡
Overall inflation in Canada slightly increased in March due to higher energy costs.
Food and dining prices are stabilizing, but housing costs are still rising.
Core inflation measures are improving, suggesting easing inflation pressures.
Investing tip of the month 💰️
One of our favourite ETFs as of late is the CASH ETF (Horizons High Interest Savings ETF). This is yielding close to 5% right now, and so if you have any excess cash in your brokerage accounts - you should consider parking it there while interest rates are high! We made a little video on this too:
If you want an extra bonus, open a Wealthsimple account to do this, and you will get an extra $25👇️
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Capital gains changes - be in the know!
The Canadian federal government, as outlined in Budget 2024, has raised the taxable portion of capital gains over $250,000 to 66.67%, effective from June 25, 2024. Previously, only 50% of capital gains were taxable, and these were added to an individual's income for the year, with the highest tax rate on these gains capped at 27%.
You can still reduce their capital gains tax by using registered accounts, reporting capital losses, or claiming the principal residence exemption. So make sure you plan right!
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See you next month!
The Wealth Awesome Team
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