Canada's Inflation Holds Steady Ahead of Crucial BoC Meeting
Canada's Consumer Price Index (CPI) held steady at 3% year-over-year in August, matching July's print and meeting economists' forecasts. The reading may already be outdated by the time the Bank of Canada meets for its October 28 rate decision.
The BoC's two preferred core gauges - CPI-trim and CPI-median - remained near the central bank's 2% midpoint target, holding steady at 1.9% and 2.0%, respectively. This suggests that a prolonged hold at 2.25% is still possible.
However, September carries a different kind of risk, with Brent crude crossing US$100 per barrel and the full effect of Donald Trump's new 50% tariffs yet to appear in any CPI release. Economists have grown more hawkish about the rate outlook, with at least one analyst flagging December as a live possibility for a rate increase.
As the October 28 decision will be accompanied by a Monetary Policy Report (MPR), it is set to be the most consequential BoC meeting of the second half of 2026. The language from Bay Street has already shifted how mortgage professionals are framing rate conversations with clients, with some warning that rates may not be heading materially lower.