In a recent interview with the Daily Herald Tribune and the Financial Post about what the Bank of Canada is expected to do to continue to manage inflation, Chief Economist Charles St-Arnaud noted that although inflationary pressure may be close to peaking, the odds of a hike from the Bank of Canada still remain high.

“The recent trend in the CPI monthly changes suggests that inflationary pressures are losing momentum. As such, the three-month annualized change in most CPI components is below their year-on-year changes, except for food prices, suggesting that inflationary pressures may be close to peaking.

St-Arnaud also noted that while inflation is decelerating, it remains well above the BoC’s target of two per cent, inflation expectations are rising, and inflationary pressures remain broad. With this in mind, we believe the Bank of Canada will continue to hike interest rates.
In our view, the BoC will likely increase its policy rate by 50 basis points at the October meetings. However, with inflationary pressures continuing to broaden, as evidenced by the share of CPI components rising by more than five per cent and the median at 6.8 per cent, there is a risk the BoC could hike 75 basis points, front-loading some of the increase.”
Previous Post
Chief Economist speaks to BNN Bloomberg about Alberta’s missing oil boom
Next Post
Food bank fundraiser for International Credit Union Day