“The supply chain index by the New York Fed is basically back to normal. Shipping costs are down dramatically, and shipping activity back to normal today in the US,” Tal said. “You have 20% more truck drivers than before the crisis – so this is going down.

“Why is it important from your perspective? Because if all the inflation that we’re seeing is coming from supply, then there is nothing the Bank of Canada can do about it, because supply means outside the country… the Bank of Canada, the Fed, can take interest rates to the sky [but] that will do nothing if all the inflation is coming from outside the country.”

The national annual rate of inflation mainly coming from Canadian sources is a good sign, Tal added, because those domestic sources are generally more responsive to higher interest rates than external ones. “The Bank of Canada is empowered by this trend, and makes it more effective,” he explained.

Another encouraging indicator where inflation is concerned: the fact that retailers’ profit margins are slowly being punctured, with those figures having skyrocketed during the pandemic thanks partly – but not entirely – to supply chain difficulties.

“I suggest that during COVID, many retailers were hiding behind the fog of supply chain… We have seen a significant increase in profit margins,” Tal said. “Now with supply chain going back to normal, you cannot hide behind that anymore. So margins are going down. That’s a major disinflationary force that we are seeing.”