The fourth quarter of 2024 witnessed inflation levels that fell within the Bank of Canada’s target range, continuing interest rate cuts, political drama domestically, south of the border and abroad.

Decreasing economic growth, rising unemployment figures and the receding inflation trend, lead the Bank of Canada to cut interest rates twice during the quarter, by a ‘jumbo’ 50 bps each time, to bring the overnight rate to 3.25%, the lowest it has measured since October 2022. These cuts were expected by investors, and while the market largely believes further cuts will follow in 2025, it also believes we are closer to the end of the rate cut cycle than the beginning. But the year was a positive one for fixed income investments, and decidedly so for credit.