Central banks have a simple formula for fighting inflation: raise interest rates, wait for the economy to weaken and demand to fall, and inflation will soon follow suit. 

What if the formula is wrong?

Catch up: Some experts are making the case that higher interest rates are now driving stubborn inflation that’s sticking around both in the U.S. and Canada.

 On this week’s episode of Free Lunch by The Peak, we sat down with Dan Skilleter from Social Capital Partners to talk about why Canada isn't that much more equal than the U.S.  

Today on “keeping up with federal budget announcements coming out weeks before the actual federal budget announcement” is a policy change covering housing affordability.  

What happened: Canada is rolling out new housing affordability measures for first-time homebuyers, including extending maximum mortgage amortizations to 30 years and increasing the amount that can be withdrawn from an RRSP to buy a first home to $60,000.

Let your friends with variable-rate mortgages know you’re thinking of them this week.

What happened: As expected, the Bank of Canada held the policy rate steady at 5% for the sixth consecutive meeting, noting that "inflation is still too high and risks remain" in the form of a resilient growth forecast, even though both inflation and the labour market are cooling.

When it comes to inequality, Canada may not be so different from our southern neighbours after all.

Driving the news: The wealthiest 0.1% of Canadians own 12.4% of total wealth in the country, according to a new study by Social Capital Partners, a Toronto-based think tank.

 This week, we’re revisiting an older episode of Free Lunch by The Peak where William Huggins from the DeGroote School of Business breaks down everything about productivity.  

Canadian-Indian relations have been, shall we say, testy lately. But you wouldn’t know it from looking at the investments Canadian pension funds are making. 

What happened: The Ontario Teachers’ Pension Plan (OTPP) will invest ~$107 million in Indian B2B fintech company Perfios, unlocking unicorn status. It’s the latest investment OTPP has made into an Indian startup since launching an Indian investment drive in 2022. 

Sure, it’s easy to poke fun at cheesy cash-for-gold infomercials, but maybe the Russell Olivers of the world knew something we didn’t about where gold prices were heading.

What happened: The price of gold reached a new all-time high of US$2,185 per ounce on Friday, part of a rally that’s seen gold’s value jump 30% since the end of 2022. 

If there’s one thing we all can agree on, it’s that in Canadian business, publishing an open letter to your enemies in a newspaper is one of the most dramatic things you can do. 

What happened: That’s exactly what over 90 business leaders from top Canadian companies did when they publicly asked the country’s finance ministers to devise new rules for pension funds to invest more in Canadian businesses. 

“Babe, wake up, Tiff Macklem is dropping the rate decision today…,” if this isn’t how your partner woke you up this morning, let us get you up to speed. 

Driving the news: The Bank of Canada is widely expected to hold interest rates steady today for the fifth consecutive rate announcement. This is even as the inflation rate dropped to 2.9%, far from its 8.1% peak in 2022 and within the bank’s target range of 1% to 3%.