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Economic context and 2023 return

May 24, 2024

Economic commentary 2023

The best way to understand the current economic situation is to take a brief look back in time. After a number of twists and turns, and months when inflation and rising interest rates were the focus of attention, we present a summary of the markets and economic developments here and abroad over the past year.

Key rate hikes

In 2023, the Bank of Canada maintained a restrictive monetary policy with the aim of bringing inflation closer to its target range of 1.00 to 3.00% annually. Three increases in the key rate totaling 0.75% were made during the year, bringing the rate to 5.00%. This approach contributed to a decline in inflation, with the Consumer Price Index (CPI) falling from 5.90% at the start of the year to 3.40% at its close, after peaking at 8.10% in June 2022. Despite challenges such as inflation and rate hikes, the Canadian economy showed some resilience in 2023, thanks in particular to a strong job market and sustained demographic growth.

In the United States, the Federal Reserve (Fed) raised the key interest rate four times to counter inflation and stabilize a very buoyant job market, with a historically low unemployment rate hovering around 3.50% for much of the year. This series of increases raised the rate by 100 basis points to between 5.25% and 5.50%.

Market fluctuations

The bond market experienced significant fluctuations. Initially optimistic with expectations of rate cuts by central banks due to falling inflation, the market was thwarted by persistent inflation in the first half of the year, leading to higher rates and lower bond prices. However, the last quarter was marked by significant bond rallies, spurred on by encouraging economic news concerning the fight against inflation. Overall, the bond market recorded gains of 6.69% in 2023 according to the FTSE Universe bond index, which contrasts positively with the 11.69% decline observed in 2022.

Global stock markets have rebounded from the significant declines of 2022, buoyed by technology stocks and the anticipation of a possible interest rate cut in early 2024. After a positive first six months, markets retreated for most of the second half of the year before rising again from November onwards and ending the year strong.

In Canada, the S&P/TSX Composite Index rose by 11.80% over the year as a whole, marking an improvement on the previous year’s decline of 5.80%. In the U.S., the S&P 500 index in Canadian dollars approached its all-time high, rising by 22.90% in 2023, driven by technology sectors, particularly those linked to artificial intelligence.

Globally, investors also benefited from good performances: the MSCI World index posted a positive return of 21%, the MSCI EAFE index representing the Europe-Asia zone rose by 15.70%, and the emerging markets index gained 7.3%. In Japan, the Tokyo Stock Exchange’s Nikkei index rebounded by 28% in 2023, its best annual performance in ten years.


Performance of Kaleido plans


Compound annual returns on IDEO+ plans

Net compound annual return at December 31, 2023


1 year

Since creation


4,40 %

2,59 %


6,57 %

3,66 %


6,68 %

5,99 %



Net compound annual returns for group plans

Net compound annual return at December 31, 2023


1 year


7,20 %


5,83 %


6,13 %