According to Canadian statistics, the annual inflation rate jumped to 4.7% in October 2021, recording its highest level since 2003. The October inflation analysis further indicated a new pandemic peak of the consumer price index, which exceeded the Bank of Canada’s target range of 1-3% for the seventh month in a row.
To help investors avoid the risks of the increased inflation and interest rates, BMO has published a report which will help navigate the situation.
The senior economist of BMO Capital Markets, Robert Kavcic, believes the inflation will be steadier than expected, and that spikes in interest rates are projected to happen sooner and develop faster to come to a higher level.
Furthermore, Kavcic stated that the present circumstances aren’t related to stagflation. Although the primary focus is on supply-side limitations, the truth is that demand is high, while job markets are solid and the unemployment rate is going down.
BMO’s report introduces a few strategies for investors to help them overcome the persisting inflation. Some suggestions include supporting Canadian equities, commercial real estate, as well as inflation-protected notes. Moreover, expanding geographically, staying cautious of debt, and holding in borrowing costs are additional propositions.
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