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January 19 2024 Cayley Roddie

Post Event Recap | Market Touchpoint with National Bank

Deborah Yedlin and Martin Lefebvre speaking on stage

On January 18, the Calgary Chamber presented Market Touchpoint with National Bank, providing Calgary’s finance and business sector with a look-ahead for the financial prosperity of Alberta, Canada, and beyond for 2024. Martin Lefebvre, Chief Investment Officer at National Bank shared his insights, using data to show trends dating back to the 70s. Touching on a variety of topics including soft landings, immigration, supply chain and more, Lefebvre shared his insights regarding the year ahead.

The market outlook

Lefebvre began by reflecting on previous years, noting how we got here. He says “2022 was difficult for investors, whether you had an aggressive profile or were more conservative, yields were crazy because of inflation. Borders reopened, we were able to travel again and consume like we used to, which exerted pressure on prices like never before.”

Shifting gears quickly, he jumped into the upcoming year. “There is probability of recession in the next 4 quarters, but it hasn’t happened yet. A soft landing is the prevailing view, and everyone is talking about it. For once in our lifetime, we were able to engineer a soft landing. What is a soft landing?” Lefebvre asks and answers, “When there is inflation, we need to increase interest rates to slow down the economy and bring inflation back down to 2% without further slowing down the economy.”

As Lefebvre notes, we have seen the Bank of Canada use interest rates to control the economy, working to reduce inflation, however we’re not in the clear just yet. “There is still fairly a lot of pressure on prices that can be felt. Inflation is coming down, but it’s not a full deflation.”

Despite noting that inflation has not completely gone away, Lefebvre held strong that the market is in a good place. “We know inflation is moving in the right direction. If you analyze the recent trend, it's already within the Feds’ comfort zone. Down the road, this should lead to rate caps and right now the Feds are telling us they’re done with monetary tightening.”

While Canada may not yet be in the clear altogether, Alberta does appear to be in a better spot compared to other parts of the country. “The only thing that will have central bankers cut rates faster is an outright recession, so our economic teams force is predicting that in the second part of 2024 we could see a slight recession in the US. We find that we’re already in recession in Canada and there may be a slight rebound in the fourth quarter, but we should see some downward momentum in the country and Alberta should fare a little better” Lefebvre explains, “We see a stagnation around 4%, but the margin of error could have Canada stay in positive territory. Alberta saw the chunk of the population growth, and that usually fares well.”

“Goods prices will be in deflation pretty soon, which is normal, so the thing that we’re watching is non-mortgage related services prices, which are linked to wages. Wages are fairly robust right now, they’ve gone down from 4.4% to about 4%, which is what the Bank of Canada wants to see,” says Lefebvre.

He continued to note other areas of inflation noting that the prices of airfare had gone because we were able to start travelling again and restaurant prices went up because food prices went up, but says “we’re starting to see a soft landing and getting back to the 2% inflation rate.”

“It seems that our economy is in a more dire situation than the US for right now, but for the soft landing theory to work, the feds will have to lower the interest rates eventually. The more they wait, the worse the recession will be,” says Lefebvre, “I believe they will lower it in the second quarter.”

Shifting the conversation to technology, Lefebvre offered more optimism. “AI will create a new flow of jobs, we need that, it will offer higher mobility to workers. AI won’t put people out of jobs – the internet didn’t – it’s just never happened that way.”

When asked about bitcoin, Lefebvre joked that he “loves it,” but continued, “The thing with bitcoin is that it’s pure speculation—you can’t do anything with that except hope it will go up. The real bitcoin lovers think it will go up to a million dollars, but why would that be? If you bought it at pennies you made a lot of money, but getting access to your cash is another issue.”

Lefebvre left the audience with a cautiously optimistic message: “You can expect a lot of volatility, but that’s just going to be opportunity for the next cycle and I’m hoping to see a slowdown so we can begin that next cycle.”

To learn more about National Bank, visit their website at
To see other upcoming Calgary Chamber events, view our event calendar at Events Calendar | Calgary Chamber of Commerce.