Here’s what the July CPI means for your clients
She added that “Short-term Government of Canada bond yields are up slightly on the higher inflation read, but given the travel impact on inflation should fade in the coming months, we aren’t too concerned that core inflation running slightly above 2% should spook the BoC into raising interest rates.”
Nathan Janzen, managing director at RBC Economics in Toronto, and his colleague Abbey Xu, also an economist at RBC Economics, wrote that July’s report remains “consistent with a relatively favourable combination of firming economic growth and underlying inflation close to target,” though the approaching tariff deadline adds uncertainty.
RBC expects the overnight rate to remain at 2.25% through the remainder of 2026, keeping the prime lending rate steady at 4.45%.
What the data actually showed
Statistics Canada reported Monday that the consumer price index (CPI) rose 3% year over year in July, up from 2.8% in June, with prices climbing 0.5% on a monthly basis.
Gasoline was the primary driver, rising 25.7% year over year as Middle East hostilities continued to disrupt energy markets.
