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Special Report

Canada Inflation Research Brief

May 2024

Inflation Continues on Downward Trend,
Increasing the Likelihood of June Rate Cut

Canada witnesses broad-based easing in inflationary pressures. Inflation hit 2.7 per cent in April — down from the 2.9 per cent reading in March — marking the fourth consecutive month that year-over-year price growth fell within the Bank of Canada’s target range. The Central Bank’s preferred measures of core inflation also continued to inch lower and are now within the BoC’s target range for the first time since June 2021. CPI-median fell from 2.9 per cent to 2.6 per cent and CPI-trim declined from 3.2 per cent to 2.9 per cent, bringing the three-month annualized rate to just 1.6 per cent. Broad-based deceleration in the headline CPI was led by food prices, services and durable goods, while it was moderated by gasoline prices and shelter costs. With both headline and core inflation now largely trending down for four consecutive months, the likelihood of a June interest rate cut continues to grow. 

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