The Bank of Canada (BoC) kept its policy rate at 5.00% this week, as expected, signaling concern about inflation. The focus is on shelter inflation, with models suggesting 50% of upcoming inflation will be shelter-driven. The bank might tolerate higher inflation if other consumer price index (CPI) components moderate. The next BoC meeting is on March 6th, with a 15.5% implied probability of a rate cut, although predictions are uncertain.

In U.S. news, Q4 GDP annualized quarter-over-quarter was 3.3%, exceeding expectations but lower than the previous quarter's 4.9%. Consumer spending rose by 2.8%, driven by strong holiday shopping. However, slower growth in residential investment and affordability challenges in the housing market tempered overall economic growth.

On the domestic front, Canadian Prime Minister Trudeau called a national summit to address a surge in auto theft, with 9,600 vehicles stolen in the Toronto region in 2023. In debt capital markets, TD Bank successfully issued a $2 billion three-year covered bond, demonstrating broad interest beyond traditional buyers.

In summary, the BoC maintained interest rates, the U.S. saw positive GDP growth, and there were developments in Canada regarding auto theft and debt capital markets.

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