12/15/2025
Inflation is holding steady and core inflation is actually cooling a bit .. at least that's what they tell us in the news these days.
What they are not telling us is that we can expect a spike in consumer spending over the course of the next 6 months because of the recent "cows and plows" settlement.
For the most part, if you're indigenous of 18 years of age or older, and your Indian band is part of the claimants in the settlement.. you can expect a handsome, and grossly overdue, cheque around the amount of $40,000 from the federal government.
From past settlements and payouts of this nature, history tells us that we are likely to see most of this money get dumped right back in to the economy at record pace. New vehicles, restaurant spending, retail spending, etc... The long short of it is it's going to affect the bank of Canada's information in the next 6 to 12 to even 18 weeks down the road...I expect 6 months.
This means the Bank of Canada is likely to stall any movements of the overnight interest rate, and potentially could even raise the interest rate because the data will be skewed with false indicatirs of consumer spending.
The number one factor the Bank of Canada looks at when they determine to raise, lower, or keep the rate the same, is consumer spending. And unfortunately that is going to be impacted from an outside source that is not necessarily accurate or long term.
While I am overjoyed that our indigenous people are finally getting some Financial remedy...I understand how this affects the long game. And whether I like it or not, it's my job to share information relevant to the industry. And the overnight interest rate is very very very relevant.
But it's okay, before summer 2026 - we will see this spending level off and the bank of Canada's data will return to normal. It's going to be a bumpy ride over the next 6 months though...just hold on to your horses. And don't be surprised if we see a momentary increase to the interest rate.
Be awesome and Happy Holidays!!
