Below, you will find our monthly market update and relative information that pertains to the current state of the economy.

Market Update

• All of the market indices closed higher than the beginning of the month.
  • • The S&P 500 finished at 6,939.03 pts (1.36%)
    • The DOW finished at 48,892.47 pts (1.72%)
    • The NASDAQ finished at 23,461.82 pts (0.95%)
    • The TSX finished at 31,923.52 pts (0.66%)

Canada

Monetary Policy

• On January 28^th, The Bank of Canada (“BoC”) decided to leave the overnight lending rate unchanged.
  • Currently, the overnight rate is 2.25%, the Bank Rate is at 2.50%, and the deposit rate is at 2.20%.
  • “Monetary policy is focused on keeping inflation close to the 2% target while helping the economy through this period of structural adjustment. Governing Council judges the current policy rate remains appropriate, conditional on the economy evolving broadly in line with the outlook that we have published. However, uncertainty is heightened and we are monitoring risks closely. If the outlook changes, we are prepared to respond.”
  • The next interest rate announcement will take place on March 18^th.

Economic Data

• Canada’s annual inflation rate was 2.4% in December, up from the 2.2% rate in November. Economists were expecting a rate of 2.2%.
  • The pickup in inflation during December was largely in response to the two-month GST/HST holiday that began in 2024, which created lower base prices for this year’s comparison.
• Canada’s economy lost 24,800 jobs in January, marking its first month of job losses since August 2024.
• Canada’s labour market showed signs of stabilizing over the previous few months, but January’s report shows some lingering fragility amid economic and trade uncertainty.

U.S.

Monetary Policy

• The Fed decided to leave the target range for the federal funds rate unchanged in its January meeting.
  • The target range for the federal funds rate is 3.50 – 3.75%.

• “In considering the extent and timing of additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks. The Committee is strongly committed to supporting maximum employment and returning inflation to its 2 percent objective.”
• The next Fed meeting will take place on March 17^th & 18^th.

Economic Data

• The personal consumption expenditure price index (PCE) rose by 2.8% on a year-over-year basis in November after rising by 2.7% on a year-over-year basis in October.
  • Data from both months were included due to the U.S. government shutdown in the fall of 2025.
• U.S. economic growth was revised higher to 4.4%, annualized, in the third quarter of 2025 in a second and final estimate. Stronger consumer spending and exports drove better-than-expected growth over the quarter.
• Manufacturing activity in the U.S. expanded in January, growing at its fastest pace since August 2022.
  • The sector benefited from a robust increase in new orders and production, which both expanded in January.

Global

• The European Central Bank (“ECB”) held its three policy interest rates steady at its first meeting of 2026. The ECB’s main refinancing rate currently stands at 2.15%.
  • Europe’s annual inflation rate was 1.7% in January. The ECB believes inflation is likely to be near its 2% target over the medium term. Europe’s central bank did caution that the outlook for the eurozone economy remains unclear amid geopolitical, trade and policy uncertainty.
• The Bank of England (“BoE”) held steady, keeping its policy interest rate unchanged at 3.75%, in what turned out to be another close vote among BoE officials.

Notes From our Firm

• The RRSP contribution deadline for the 2025 tax year is March 2nd, 2026
  • If you have any questions, please do not hesitate to reach out to your advisor.
  • All monies should be deposited no later than 4PM on FRIDAY, FEBRUARY 27^th.
• Our team analyst, Garrett, and his wife, Grayson, welcomed their second baby boy – William Aaron Spiering – on Tuesday, February 3rd. Both baby Will and Mom are healthy and well.

As always if you have any questions, please feel free to reach out to us. Or, if you know someone who would like an opinion on their investments or insurance, please connect us! There is no better compliment than a referral from one of our current clients.

Yours Truly,

The Team, C.R. Smith Financial

Community, Respect, Service & Financial Integrity