The CAD appreciation finally passes through to inflation

The long wait for the pass-through appears to be over: according to today’s CPI release, core inflation has gone from 2.5% in June down to 1.8% in September. (The headline CPI number was 2.4%).

Core_cpi

The only sectors where prices didn’t fall were in the areas least affected by the exchange rate: shelter and services. Although it’s still unlikely that the Bank will decide to cut interest rates on December 4, we should expect a signal that the Bank is thinking about reducing them on January 22.

One comment

  1. marcello's avatar

    what is the uncertainty bar on those numbers ?
    any first year science student would tell you the graph is next to worthless without them

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