Nov 24, 2023

Alpen Investment Advisors TLDR Financial Market Recap: May 2023

Inflation spikes, grocery prices high, interest rates steady, housing market shows signs of recovery.

  1. Inflation Picks Up in Canada

The inflation rate in Canada increased unexpectedly in April, reaching 4.4% annually (Evans, 2023). Experts had predicted a slight decrease from March's 4.3%, but prices rose again. The cost of essentials like gas, rent, and mortgages rose last month, leading to the first acceleration in the cost of living since June 2022, when inflation hit a high of 8.1%.

Figure 1: Canadian Inflation Rate (Evans, 2023)

  1. Grocery Prices Remain High

Food prices remain a concern for Canadian families, staying at high levels despite some reduction from the record highs (Evans, 2023). Grocery prices have increased by 9.1% in April, lower than March's increase of 9.7% but still more than double the overall inflation rate.

  1. Interest Rates Won't Be Falling Anytime Soon

Bank of Canada Governor Tiff Macklem stated on May 18 that Canadians shouldn't expect interest rates to return to the very low levels seen in the past Rendall, 2023). With inflation rising in recent years and the central bank increasing rates, borrowing costs will be higher. While the benchmark interest rate is currently at 4.5%, the highest in over a decade, it will eventually be adjusted based on economic conditions. However, borrowers shouldn't rely on the extremely low rates seen in the past.

  1. Housing Market Shows Signs of Improvement

The Canadian housing market is starting to rebound, with increased activity and rising prices in many cities, such as Toronto, Montreal, and Vancouver (Hogue, 2023). Buyers feel more confident now that the central bank has stopped raising interest rates aggressively. More properties were listed for sale recently, which could stimulate demand. However, affordability still needs to be addressed, particularly for first-time buyers, which may limit the extent of the recovery.

Financial Tip of the Month:

Building an emergency fund with 6 to 12 months' savings is crucial, given the possibility of a recession.

We hope you find this information valuable and informative. As always, please don't hesitate to reach out to us at for any questions about your portfolio or to help navigate the process of growing and preserving your wealth.


Evans, P. (2023, May 16). Canada’s inflation rate is going back up again. CBC News.

Hogue, R. (2023, May 15). Canada’s housing markets heat up this spring. RBC Thought Leadership.,trajectory%20in%20the%20period%20ahead.  

Rendell, M. (2023, May 20). Canadians should not expect Boc to return to low rates, Macklem says. The Globe and Mail. 

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