As we move toward the end of February, it’s gratifying to see good news on a number of different fronts, including some nice stock market gains, across the board.
As we now know, the inflation rate here in Canada fell to 2.9% during the month of January, down significantly from where it was in December at 3.4%. It appears the price of gasoline was the biggest contributor, dropping approximately 4% from a year ago.
The Consumer Price Index (CPI) also fell to 3.2% from 3.5% in December. Food prices saw significant deceleration with inflation in this category dipping to 3.4% from 4.7% in December.
Despite some of the positive data listed above, it is likely the Bank of Canada will continue to maintain their “wait-and-see” attitude where lowering interest rates are concerned. With higher wages and core inflation hovering around the 3% mark, it does make sense for them to be cautious.
The majority of economists and other financial analysts are still suggesting the first drop in rates could come in June. However, as I said in my January writing, I’m not overly convinced that it won’t be until the fall, but I hope to be proven wrong!
Libby
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