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Special Report

Canada Inflation Research Brief

October 2024

Headline Inflation Falls Below Central Bank
Target, Setting the Stage for CRE Rebound

Inflation reading underscores the need for larger rate cuts. Canada’s consumer price index rose 1.6 per cent year over year in September – down from 2.0 per cent in August – amid a 7.1 per cent monthly drop in gasoline prices. This was the lowest CPI reading since February 2021 and well-below the consensus estimate of 1.8 per cent. When excluding gas, however, inflation held at 2.2 per cent. Additionally, the Bank of Canada’s preferred measures of core inflation, CPI-median and CPI-trim, remained unchanged at 2.3 per cent and 2.4 per cent, respectively. On a three-month annualized rate, these core measures on average edged down to 2.1 per cent. As a result, an outsized rate cut of 50 basis points at the Bank of Canada’s policy meeting later this month is now heavily favoured.

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