US Tariff Risk Outweighs Pick up in Canada CPI

Dow Jones
08/17

1023 ET - An acceleration in Canada inflation in July won't move the needle much for the Bank of Canada, says Tiago Figueiredo, economist at Desjardins Securities. A return to 3% total inflation was driven by war-fueled energy prices and one-off factors related to World Cup travel costs, he says, adding that stripped-down measures of core CPI looked contained. "There is still limited evidence that higher energy prices are spilling over to other goods and services," Figueiredo says. Trade talks between Ottawa and Washington to avert a new 50% tariff on certain Canadian goods "remain the primary risk" to the economic outlook, he adds, reinforcing Desjardins' call for the BOC policy rate to remain steady through 2026.

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