You may have heard economists talking about the risk of “stagflation” following news the US economy shrank in the first quarter of 2022. But what is stagflation exactly and should you be worried?

Last week, Argentina’s congress approved a restructuring deal for $45 billion in debt owed to the International Monetary Fund (IMF). Following two years of negotiations, President Alberto Fernández urged his parliament to approve the deal prior to a payment of $2.8 billion due on March 22. The agreement ultimately removes the threat of an imminent default on $19 billion of repayments due this year. The terms of the agreement require Argentina to gradually reduce the budget deficit over the next three years while curbing central bank money printing in exchange for a four-and-a-half-year grace period on IMF payments.

There was monetary news coming from both sides of the border this Wednesday as the Bank of Canada released their inflation numbers for February and the US Federal Reserve announced their first rate hike since 2018 at 0.25% setting the overnight rate at 0.50%.

Below is a breakdown of the specific consumer sectors which contribute to US inflation numbers:

With the news of Russia’s invasion of the Ukraine, the economic impact of the conflict has already been felt.

The political factors involved in Russia’s military action against its neighbouring nation are complex and date back to the Second World War. We recognize that this is not a simple situation that can be explained away from a financial perspective either. But with so much uncertainty, the focus that we have is the impact that this news will have on our clients. We do hope that all those involved and affected by these circumstances, whether Ukrainian, Russian, or otherwise will come to a swift and peaceful resolution.