Canadian Tax Holiday Hiding Inflation Surge, BoC Should Pause Cuts: BMO
Canada’s tax holiday ran for two months but it probably felt much shorter, and with good reason. Statistics Canada (Stat Can) data shows the Consumer Price Index (CPI) accelerated in January. The central bank’s preferred inflation measures are now approaching the upper bound, and will bust through it like the Kool-Aid Man once the temporary suppression from the GST/HST Holiday fades. At least one Big Six bank told investors the central bank is likely to pause rate cuts in the coming months, as CPI is set to rip in just a few weeks.
Canadian Headline Inflation Accelerates As Cheap Energy Disappears
Canadian headline inflation advanced but remained below that crucial 2-point mark the public watches. Annual growth of CPI climbed to 1.9% in January, accelerating 0.1 points from a month prior. Stat Can emphasized that volatile energy prices were behind much of the growth, and stripping gas prices reduces the rate to just 1.7% over the same month. …[Continue Reading]