Bank of Canada rate hike case weaker than Fed’s, CIBC argues
“In Canada, inflation is much less broad-based,” Lao wrote.
Only 38% of the country’s 55 major CPI components are rising faster than 3% a year, six points above the 1999–2019 average.
In the US, about half of the more than 100 categories in personal consumption expenditures (PCE), the Fed’s preferred gauge, are running above that pace.
Gasoline makes up 4% of Canada’s CPI basket and about 2% of US PCE.
“The result is that, should gasoline prices begin to abate, it could represent a more meaningful cure for headline inflation north of the border,” the report said.
