Canada's Inflation Rate Stabilizes Ahead of Rate Decision

According to Randall Bartlett, deputy chief economist at Desjardins, inflation is currently tracking below the three per cent mark in August due to easing gas prices and receding one-off pressures from earlier summer.

A sustained decline in global energy prices depends on restoring oil flows through the Strait of Hormuz, a critical shipping lane for Gulf exports. Bartlett noted that this is contingent on developments in the Middle East and the conflict with Iran.

The Canadian government's next interest rate decision will be made on September 2, and markets are nearly 99 per cent confident it will remain unchanged at 2.25 per cent. Despite some firmness in core inflation measures last month, long-run annual rates remain near the Bank of Canada's two per cent target.

CIBC senior economist Andrew Grantham said policymakers have time to assess how oil price fluctuations and tariff situations resolve, determining whether signs of an economic rebound will be sustained. CIBC forecasts no change in the benchmark interest rate until mid-2027.