January 28, 2026 By Page and Associates

Interest Rate Commentary – 2025 Dec 31

GIC rates are a reflection of the short end of the bond yield curve, and that curve has now normalized, with short term rates having dropped lower than long term rates. We don’t expect further cuts to interest rates unless inflation or unemployment increase materially.

In the summer of 2024, 1-year GIC rates were near 5% – higher than 5-year rates – but ended 2025 just under 3%. 1-year rates generally followed the cuts to the Bank of Canada Rate, while 5-year GIC rates have remained steady despite the cuts to short rates.

Source: Dataphile via Cannex

The Bank of Canada began 2025 with the Bank Rate at 3.5% after a historically unprecedented rise from near-zero COVID-era rates in 2022 and 2023. Rates had been allowed to settle back toward the 20-year average during 2024, and the Bank made 4 further cuts of 0.25% each during 2025, as inflation has remained in the 1-3% target band and unemployment has remained steady.

Source: Bank of Canada https://www.bankofcanada.ca

Inflation had spiked due to pandemic-related supply chain disruptions and a surge in demand after economies re-opened in 2021. Some believe central banks should not have kept rates so low for so long, and the low rates may have contributed to the inflation surge. The large interest rate increases of 2022 had immediate effect in dampening the inflation rate, though prices had been lifted significantly during the high inflation years, and are unlikely to decline back to earlier levels. At least the annual inflation rate is within the 1-3% target range and not much higher than it was 10 years ago.

Source: Bank of Canada https://www.bankofcanada.ca

Unemployment had been rising from post-COVID lows since the interest rate hikes began in 2022, but seems to have peaked by the fall of 2025. While unemployment remains a bit higher than ideal, it is lower than it was 10 years ago.

Source: Statistics Canada https://www.statcan.gc.ca

We believe the Bank Rate is at a new equilibrium level, and that the Bank is unlikely to cut further unless inflation or unemployment take significant rises.

January 15, 2025 By Page and Associates

Investment Market Commentary

Equity markets in North America posted stellar returns in 2024 on the heels of a terrible 2022 and the start of a recovery in 2023. International markets went along for the ride until October, when they started to lose most of the year’s gains in the third quarter. North American markets peaked at the start of December, and gave back some gains, ending the year around October levels.

Declining central bank interest rates in 2024 have pulled down short term bond yields, but longer bonds still yield over 3.5% for Canadian 10-year bonds, and over 4.5% in the US. Recent strength in US GDP and employment statistics have decreased market expectations for further rate cuts south of the border. In Canada, economic statistics are weaker, and we may expect some further rate cuts here. International markets continue to feel the weight of conflicts in Ukraine and the middle east, as well as uncertainty over US trade policy.

(Source: tradingeconomics.com)

January 10, 2025 By Page and Associates

GIC Rate Commentary

Canadian interest rates were generally declining in 2024 after peaking in 2022-2023. The graph shows the top rates offered by over 25 institutions we deal with, for terms of 1 – 5 years (Source: Cannex Information Exchanges). The leftmost bar in each group shows the rate before Covid, the next bar the ultra-low Covid-era rates, both series showing the normal pattern of long-term rates being slightly higher than short rates. This pattern was inverted during the post-Covid rate increase phase, and just this year the 1-year rates have finally dropped below the 2-year rates, but longer terms are still below the 2-year rate. The market widely expects the Bank of Canada to cut short term rates a little further in 2025, since they are still well above pre-Covid levels.

November 15, 2024 By Page and Associates

Portfolio Benchmarks to 2024 October 31

Each month-end we publish total return data for various investment market indices, as well as a composite portfolio return benchmark for model portfolios of three different asset allocations. These may be useful guides to reasonable performance of your own portfolio or its components.

Click to view the Index Return Table.

Click to view the Portfolio Benchmarks.