Following the latest inflation data, economists are debating the implications for the Canadian economy and the potential for an interest rate cut by the Bank of Canada next month.
On Tuesday, Statistics Canada revealed a 2.9% increase in the consumer price index (CPI) for May compared to last year. Robert Kavcic from BMO Capital Markets cautioned that this rise could prompt the central bank to reconsider a July rate cut, emphasizing concerns over higher service prices and persistent wage growth.
Conversely, Tu Nguyen of RSM Canada remains optimistic, suggesting that disinflation is likely to dominate for the rest of 2024. She believes a rate cut is still possible if core inflation measures improve next month.
Nathan Janzen of RBC highlighted that the recent CPI growth was a significant surprise but noted that overall, inflation remains close to target levels. The central bank’s decision will hinge on upcoming economic data, with June’s CPI figures playing a crucial role.
Tags: #Canada #inflation #BankofCanada #interestrates #CPI #economicpolicy
